Sports Hub to come under SportSG from Dec 9 after stat board terminates deal with consortium that runs the facilities

SPORT Singapore (SportSG) will take over the ownership and management of the Singapore Sports Hub from Dec 9, and in doing so, it has initiated the termination of the Sports Hub public-private partnership (PPP).

There will be no penalty for the termination, SportSG noted on Friday (Jun 10), as terms of the agreement give the statutory board the right to conclude the partnership and take over ownership “at such time it sees fit”.

SportSG said it reached a “mutual agreement” with SportsHub Pte Ltd (SHPL) over the termination and process of the handover. It will pay SHPL an amount comprising the outstanding loan taken for the Sports Hub’s construction and a “fair open market” value of the property.

SportSG said that under its former contract with the SHPL, the government would have paid S$193.7 million per annum for another 12 years until 2035, based on 2014 prices and subject to inflation, to cover debt servicing and operating costs.

With the move to take over the Sports Hub, the government will pay for the outstanding loan taken for its construction as well as an open market value, which SportSG declined to reveal.

After factoring in the future operating costs and potential revenue generated from the Sports Hub, SportSG chief executive Lim Teck Yin said that that cost to the government for terminating the PPP would be “comparable”.

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SportSG chairman Kon Yin Tong said: “If we want to do more events, of course it will cost more. Just don’t focus on profits and costs and so on, look at the potential; and when we talk about potential, it’s not just dollars and cents.”

SHPL is a consortium comprising InfraRed Capital Partners, Cushman & Wakefield and Spectra. It was engaged under the PPP in 2010 to design, build, finance and operate the Sports Hub – Singapore’s largest PPP project – until the end of the concession period in 2035.

SHPL chief executive Lionel Yeo declined to comment on whether he would stay with the project after the Sports Hub is taken over by SportSG.

The S$1.3 billion facility was completed in 2014, and SportSG has paid an annual fee since then to finance and operate the Sports Hub and is expected to do so until the end of the concession period.

Regarding the PPP and the legacy it leaves behind, Lim said that the private sector provided expertise that the government did not have at the time. This included expertise in financing, design, construction and programming. The move also freed up fiscal resources following the 2008 global financial crisis when the project was first mooted.

Still, he said, the nation’s needs have changed since the PPP was initially forged. He also noted the government had predicted the possibility for potential changes and had built in the right to terminate the PPP.

“Obviously, when you build in the right to terminate, it suggests that there is always consideration for the evolving context for something that you cannot foresee over such a long period,” Lim said.

Regarding these changes, he noted that sports and physical activity participation has seen a “huge uptick”, while SportSG would also like to support the government’s overall preventive health strategy — Healthier SG.

Furthermore, SportSG will also look to hold more community programmes, such as by bringing the National School Games back to the Sports Hub.

“I think the existing structure has some contractual limitations that make it difficult for us to be able to consider how to build further synergy if we would like to be able to do so both commercially as well as for operations.

“When we think about the larger precinct, I think we find that there will be far greater opportunity,” Lim said, noting that the Sports Hub will be better integrated with the Kallang Alive master plan with the move.

Kallang Alive, announced by SportSG in 2019, is an 89 ha mixed-use lifestyle destination. Other developments in the pipeline include the Kallang Theatre Integrated Development and the Benaan Kapal Green.

In a Facebook post, Minister for Culture, Community and Youth Edwin Tong said that the Sports Hub must 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 to enjoy,” he said.

Moving forward, SportSG said it will engage SHPL employees individually to discuss employment opportunities. It will also continue to work with partners from the private sector.

“Both SportSG and SHPL are committed to working closely together to ensure that the handover will be smooth and will not affect the day-to-day operations and programming of the Sports Hub.”

The statutory board is also planning closer integration of the Sports Hub with upcoming Kallang Alive facilities like the Kallang Football Hub, Kallang Tennis Centre and Youth Hub.

The Sports Hub’s premier founding partner, OCBC : O39 0%, said in a statement on Friday that it remains “excited” about its partnership with the Sports Hub.

“With the new leadership, we are confident that Singapore Sports Hub will continue to be a world-class sports, entertainment and lifestyle destination in the region, and bring even more life and excitement to the Kallang area,” the lender said.