Gan warns of initial slump in new F1 term but is 'confident about longer-term appeal'

THE latest extension of Singapore's Formula One (F1) Singapore Grand Prix contract may reap lower economic benefits for the Republic than in previous years, at the start of its new 7-year term, Trade and Industry Minister Gan Kim Yong acknowledged on Monday (Feb 14).

Still, he remained upbeat on the longer-term appeal of the night race, which has been an yearly event since 2008, excluding a 2-year pandemic-related hiatus.

Singapore recently bagged a contract extension until 2028 - the longest yet. Gan noted that the annual cost of organising the race will be similar to previous terms, at an estimated S$135 million to S$140 million, with the government covering 60 per cent of approved costs.

"The first few years of the new term may reap lower economic benefits compared to previous years as international travel recovers from Covid-19," Gan said. "Nonetheless, I am confident about the longer-term appeal of the Singapore Grand Prix when international travel normalises."

He delivered the update in a parliamentary response to People's Action Party MPs Liang Eng Hwa (Bukit Panjang) and Ang Wei Neng (West Coast GRC), who had asked about considerations in extending the contract, including government subsidies and projected benefits.

Non-Constituency MP Hazel Poa, of the Progress Singapore Party, had also separately asked about the projected annual government expenditure on subsidies for hosting the event.

The minister said that the extension will help to sustain Singapore's reputation, support the recovery of the travel and tourism industry, and generate revenue and jobs for Singaporeans.

He pointed to the roughly S$130 million annual boost to tourist spending, as well as the more than 30 global meetings, incentives, conferences and exhibitions (Mice) events clustered around the race each year, and the accompanying rise in international visitor numbers.

"The government decided to support the F1 Singapore Grand Prix for another 7 years, after thoroughly evaluating the costs and benefits that a term extension could bring to Singapore," Gan said, adding that the projected economic benefits outweigh the costs to the government.

Read more:

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• Formula One Grand Prix return puts Singapore back on track for glamour