SINGAPORE - The Government will take over the ownership and management of the Singapore Sports Hub on Dec 9, after terminating its partnership with the private consortium that has been running it since 2014.
This will allow it to make the Sports Hub more accessible to the broader community for sports, lifestyle, entertainment and social activities, and also develop Kallang into a vibrant and integrated sports, wellness and lifestyle precinct.
National agency Sport Singapore (SportSG) and SportsHub Pte Ltd (SHPL) agreed on the termination on Friday (June 10), bringing an end to the public-private partnership (PPP) that has been beset with problems including the poor condition of the football field, even as world-class names and acts like Cristiano Ronaldo and U2 drew the crowds.
The PPP was to have run from 2010 to 2035. Under the arrangement, SHPL designed, built, financed and operated the Sports Hub, and bore the cost of the project, which was completed in 2014.
SportSG had to pay SHPL an annual fee of about $193.7 million from 2014 to 2035 to finance and operate the Hub. It has since paid about $1.5 billion.
The terms of the project agreement allowed SportSG to terminate the PPP and take over the ownership and management without any penalties.
Upon termination, SportSG will pay a sum to SHPL comprising the outstanding amount of the construction debt and open market value of the Hub. It said it was unable to reveal the sum to be paid to SHPL as this was being finalised.
In addition, SportSG will take over all future operating costs. The cost of terminating the PPP arrangement, together with future operating costs, would be comparable to the further $2.32 billion that SportSG would have paid had it continued the PPP arrangement till 2035, it said.
A new corporate entity to run the Hub and work with private sector partners will be set up for particular programmes or events, said Lim Teck Yin, SportGS chief executive officer. adding that this was “a more flexible arrangement”.
The 35-hectare Sports Hub comprises the 55,000-capacity National Stadium, the OCBC Aquatic Centre, a multi-purpose indoor OCBC Arena and also the 41,000 sqm Kallang Wave Mall.
The Singapore Indoor Stadium, which was built in 1990, was also absorbed as part of the Sports Hub.
The SHPL is a private consortium comprising three equity partners - Infrared Capital Partners, Global Spectrum Asia and Cushman & Wakefield Facilities & Engineering - which operate the facility.
Engineering and construction company Dragages Singapore was previously a part of the consortium but is no longer referenced on the Sports Hub website.
At a press conference on June 10, SportSG chairman Kon Yin Tong said taking back ownership and management of the Sports Hub will enable it to be turned into the "heart of sports in Singapore" and ride on synergies to develop the Kallang Alive precinct.
The Kallang Alive project, announced in 2019, will see six new developments in the area around the Hub. These include the Kallang Football Hub, Singapore Tennis Centre and a redevelopment of the Kallang Theatre.
In a first for Singapore, a velodrome looks set to be built and will be part of the Youth Hub.
SportSG said on June 10 that the Sports Hub should be a "community icon for all to enjoy - from children and youth taking part in the National School Games, community competitions and grassroots events, junior and elite athletes training and competing, to everyday Singaporeans exercising and enjoying the facilities in and around the Sports Hub".
Mr Kon also thanked SHPL for its contribution of expertise in the design and construction of the Hub, and for its role in this project since its opening in 2014.
He explained that there was "a confluence of factors" for the decision and ultimately the aim was to "unlock the full potential for Singapore". He added that it will allow the country to "keep up with the times and competitive landscape as well as the new needs of the nation".
SportSG said Singapore needs to strengthen its position as a top-tier sport and lifestyle destination in the face of intensifying competition in the region. China, for example, in 2018 beat Singapore to hosting rights for the tennis WTA Finals. Indonesia has expressed its interest to host football's World Cup.
Pressed by the media on how much the takeover would cost, Mr Kon, an accountant by training, urged the press "not to focus on the costs and profitability but also on the value offered by the project".
Sports Hub CEO Lionel Yeo, who was also at the press conference, said SHPL accepts the decision and is committed to making it successful.
In a statement, SHPL chairman Bryn Jones said it was an honour to build the Singapore Sports Hub ecosystem into the region's premier sports, entertainment, and lifestyle destination.
"We support the Government's ambitions in promoting sport among the population and harnessing Sports Hub's potential to transform the Kallang Alive precinct and we will work collaboratively and constructively to ensure a smooth transition over the next six months," he said.
In a Facebook post, Minister for Culture, Community and Youth Edwin Tong hailed the move as a "new chapter for the Sports Hub". He said it was important "for our National Stadium to be open and accessible to all Singaporeans".
"From world-class events to sport enthusiasts engaging in an active lifestyle, to everyday Singaporeans participating in community fringe events, we must turn the Sports Hub into a sporting home for all," he said.
"Through this, we must also develop a sense of pride and affinity with the National Stadium, make it OUR HOME ground, and a place where opposing teams fear to tread!"
SportSG and SHPL also vowed in a statement that they would ensure a smooth handover. SportSG added that it will continue to work with partners from the private sector to deliver the highest quality service for the Hub, and will engage SHPL employees individually to discuss employment opportunities.
"We intend to retain the expertise and experience of SHPL employees, who will be given the opportunity to transit to the new corporate entity," it said.