Did you know that the current owner of Sports Hub isn’t the government but a partnership between the public and private sector?
And that the relationship wasn’t always a happy one?
Here are 10 facts about SportSG taking over the ownership and management of Sports Hub you need to know so you can carry on a conversation and look smart.
1. When It’ll Happen
On 9 Dec 2022, the Sports Hub will change hands from Sports Hub Pte Ltd (SPHL) to SportSG.
SportSG announced the news on Friday (10 June), saying that it has reached a mutual agreement with SPHL to terminate the private-public partnership.
2. Operating For Eight Years
Back in 2008, it was announced that the Singapore Sports Hub Consortium, now known as Sports Hub Pte Ltd, is the preferred bidder for the private-public partnership.
SHPL, then, had submitted a comprehensive proposal with a focus on the community and grassroots sports.
They were awarded the contract in 2010 and the Sports Hub was officially opened in 2014.
3. Why The Breakup?
According to SportSG, the reason why they’re taking back ownership is to make Sports Hub more accessible to the wider community.
This includes sports, lifestyle, entertainment and social use; at the same time, they’ll make sure that Sports Hub is able to make money.
As for why SportSG isn’t able to work with the private-public partnership (PPP), it’s because of “contractual limitations”.
Sports Hub has its own commercial sponsors and arrangements; it is believed that if you think of the precinct, you’ll find bigger and better opportunities.
SportSG believes that this move could help Sports Hub break the limitations.
4. Not Up-To-Standard
Sports Hub ran into a series of problems under the management of SHPL.
In 2014, during the Japan-Brazil soccer match held at the Sports Hub, the Brazilian team’s coach complained about the quality of the soccer field.
During Jay Chou’s concert, water leakage ruined the night for concertgoers.
An audit carried out by KPMG also found that there is a “lack of alignment” between GSP, shareholders and the government stakeholders.
5. Expensive
It’s expensive to host events at the Sports Hub under the current management.
In 2016, the bill for holding the National Day Parade came out to S$39.4 million, more than double the amount for NDP held at The [email protected] Bay over the past years.
Event organisers have also said, back in 2015, that holding events at Sports Hub is too costly for them.
In Mar 2020, SPHL was fined for not meeting the minimum number of sporting event days at the National Stadium and Singapore Indoor Stadium per year.
6. Nothing To Do With Previous Experiences
After reading through the previous two points, you’re probably going, “Ahh, no wonder they broke up.”
Well, if you’ve thought so, you’re wrong.
According to SHPL CEO Lionel Yeo, it is “not correct to say that historical experience is what drove this decision.”
The government did not base their decision on what happened during SHPL’s management of the facility.
Instead, their decision was based on the analysis of Sports Hub’s current situation and its future needs.
7. Sports Hub’s Position Must Be Strengthened
There is an increasing amount of regional competition from other world-class venues.
In other words, if Sports Hub doesn’t strengthen its position soon, we might just see larger sporting events stop coming to Singapore, making their way elsewhere instead.
The upcoming Kallang Alive precinct will also have facilities including the Kallang Football Hub, Kallang Tennis Centre and Youth Hub.
8. Projected Cost Similar To If PPP Went On
According to SportSG, the cost of terminating the partnership and running Sports Hub is “comparable” to if they had let PPP go on until the contract ends in 2035.
Since 2014, the Singapore government gives S$193.7 million to SHPL per year to run the facility.
Taking the annual fee of S$193.7 million, the total cost of the PPP will be around S$2.4 billion if the partnership is allowed to continue until 2035.
This amount is similar to the projected cost the Singapore government has for the following:
- Termination of the partnership and taking over
- Repaying the outstanding loan
- Daily operating costs of running Sports Hub
While there will be variable costs, SportSG is confident that they’ll be able to have greater cost savings and commercial opportunities across the larger Kallang Alive precinct.
9. Day-to-Day To Remain Undisrupted
SHPL and SportSG say that they are committed to working “closely” during the handing over of the facility.
They will avoid disrupting the day-to-day operations of Sports Hub as well as its programmes.
SportSG will also be engaging with current Sports Hub staff on an individual basis to discuss employment opportunities.
10. Did PPP Fail?
The biggest question of the day: Did the private-public partnership model fail?
According to SHPL CEO Lionel Yeo, the private-public partnership (PPP) model didn’t fail.
At that point in time, the decision was made with valid considerations in mind.
It helped the government to leverage the private sector’s financing and expertise, which also allowed them to tide over the 2008 financial crisis.
It’s just that the context of today has evolved, Mr Lim said.
Feature Image: macashop / Shutterstock.com