- Sport Singapore announced that it will be taking over the Singapore Sports Hub
- It is terminating its public-private partnership with a consortium of private partners
- This form of partnership facilitates cross-sector collaboration between the public sector and private sector
- Singapore has had success cases with such partnerships, such as ITE College West
- However, the Government has taken back other facilities under these arrangements before, such as Tuaspring Desalination Plant
SINGAPORE — National sports governing body Sport Singapore (SportSG) announced on Friday (June 10) that it will be taking over the management and operations of the Singapore Sports Hub, ending its public-private partnership with a consortium 12 years ahead of time.
It explained that its decision to terminate the partnership was so that it could better integrate the hub with upcoming facilities in the surrounding Kallang precinct, such as the Kallang Football Hub, Kallang Tennis Centre and Youth Hub.
When the Government announced its invitation to tender for the Singapore Sports Hub in July 2006, it described the project as “one of the world’s largest sports public-private partnership projects”.
Under this alliance, the consortium bore the cost of the construction and operations, while SportSG paid an annual fee of S$193.7 million to the consortium for operations once the facilities were built. The partnership was to last until 2035.
WHAT IS A PUBLIC-PRIVATE PARTNERSHIP?
Public-private partnerships are a cross-sector collaboration, which allows governments to work with private-sector companies on various projects, such as infrastructure and operations.
The Ministry of Finance (MOF) said in 2004 that the public sector would engage the private sector to construct facilities or supply equipment, while public agencies will own and operate these facilities to deliver services.
“With the public-private partnership, the public sector will focus on acquiring services at the most cost-effective basis, rather than owning and operating assets,” MOF said.
MOF's handbook on public-private partnerships stated that most of such partnerships last between 15 and 30 years, and it allows public services to be delivered “in a more value-for-money way by making optimal use of the public and private sectors’ expertise, resources and innovation”.
This also allows the Government to benefit from the private sector’s innovation and investment, and optimise total project costs through outsourcing to the same private company or consortium.
MOF also said that such partnerships will allow for better asset utilisation by sharing government assets and facilities with third-party users, while spreading responsibilities between both the public and private sector.
On why the Government chose to adopt a such a partnership in building the Sports Hub, SportSG said previously that such a consortium “will help optimise life-cycle cost and operations efficiency".
“The consortium is also incentivised under the public-private partnership agreement to complete construction as soon as possible, as it would only start receiving the Government’s annual payments when the facilities are built and available, ” it added.
Another example of this form of partnership in Singapore is the country's first desalination plant, which was developed through an alliance between national water agency PUB and SingSpring, a wholly owned subsidiary of water treatment company Hyflux.
Under this partnership, SingSpring designed, constructed, finances, owns and operates the desalination plant — called SingSpring Desalination Plant — to supply water to PUB for 20 years, while PUB would buy the water from SingSpring. It will be completed in 2025.
HAVE SUCH PARTNERSHIPS BEEN SUCCESSFUL IN SINGAPORE?
Even though the Singapore Sports Hub’s public-private partnership will be terminated, there are still such ongoing arrangements that have successfully completed their agreement terms in Singapore.
One of them is TradeXchange, an IT project between Singapore Customs and Crimsonlogic, which concluded in December 2005.
The partnership, which lasted for a 10-year period, allowed for the creation of a “one-stop integrated logistics information port” where Crimsonlogic developed the software, maintained it and operated the system.
After the partnership expired in 2017, it was replaced by the Networked Trade Platform, which the Singapore Government had developed.
Other successes include ITE College West, Keppel Seghers Tuas Waste-to-Energy Plant and SembCorp Changi NEWater Plant.
HAVE THERE BEEN OTHER EARLY TERMINATIONS?
The Government's early takeover of the Singapore Sports Hub is not the only case where a public-private partnership has failed.
PUB took over Singapore's second water desalination plant in 2019, ending its agreement with Hyflux as the company went through a court-supervised debt restructuring.
The desalination plant — named Tuaspring Desalination Plant — opened in September 2013, and was to supply PUB with desalinated water over a 25-year period.
Sports Hub takeover: A timeline of events leading up to the Govt's move
- Sport Singapore will be taking over the Sports Hub from its current owners on Dec 9
- Completed in 2014 to replace the old National Stadium, the project was conceived to be a public-private partnership with private consortium Sports Hub Pte Ltd
- It has a chequered history that included construction delays, management changes, and technical gaffes involving high-profile events
June 10, 2022
SINGAPORE — Sport Singapore (SportSG), the national governing body for sports, announced on Friday (June 10) that it will be taking over the ownership and management of the Singapore Sports Hub from its current owner SportsHub Pte Ltd on Dec 9 onwards.
Representatives of SportSG said at a news conference that there were a “confluence of factors for the decision”, but ultimately, it wants to unlock the sports and leisure venue’s full potential for Singapore.
The 35-hectare integrated sports, entertainment and lifestyle hub in Kallang — which reportedly cost S$1.33 billion to build — has become a popular destination for visitors since it was constructed in 2014. However, its journey was not a smooth one.
The following is a timeline of events since the Government announced the construction of the hub.
JANUARY 2008: The Singapore Government announces that it has selected the Singapore Sports Hub Consortium — later known as SportsHub Pte Ltd — as the preferred bidder for the Singapore Sports Hub public-private partnership.
Led by engineering and construction firm Dragages Singapore, the consortium also consists of international private equity fund manager InfraRed Capital Partners, venue operating contractor Global Spectrum Pico (GSP), real estate services company DTZ Facilities and Engineering, and others.
SEPT 29, 2010: Groundbreaking ceremony for Sports Hub’s construction takes place.
News reports said that the ceremony was delayed till this date due to a sharp rise in construction costs worldwide in early 2008, which was followed by the global financial crisis from October 2008.
The financial crisis destabilised the global financial markets and reduced availability of credit, which in turn affected the consortium’s ability to raise the necessary funds from the private sector to finance the project.
The project resumed only after market conditions stabilised in early 2010.
JUNE 2014: Sports Hub finishes construction after 45 months and starts operations.
OCTOBER 2014: A major fiasco surfaces during the Japan-Brazil football friendly match held at the Sports Hub’s National Stadium pitch.
Among the complaints, which overshadow the match, is the state of the football pitch. Brazil's coach Carlos Caetano Bledorn Verri at the time — also known as Dunga — says that it contains more sand than grass.
Mr Lim Teck Yin, chief executive officer of SportSG, then threatens to withhold payments for the Sports Hub until it reaches a standard befitting of the magnitude of the sports events being held at the arena.
DECEMBER 2014: At the National Stadium again, Taiwanese pop star Jay Chou’s concert experience is diminished by a roof that is less than watertight. This led to early criticism of the Sports Hub before its official launch.
JULY 2015: Prime Minister Lee Hsien Loong officially opens the Sports Hub.
2015: Audit firm KPMG conducts an 18-month audit on operations and finds that there is a lack of alignment of interest among venue operator GSP, the shareholders and government stakeholders.
DECEMBER 2015: Event organisers here say that it costs too much to stage sporting events at Sports Hub, which leads to scuppered plans because it is too expensive for them.
FEBRUARY 2016: InfraRed Capital reportedly proposes to kick out GSP. Later, the consortium refuted reports and says that it will continue to work with GSP.
MAY 2016: Sports Hub chief executive officer Philippe Collin-Delavaud steps down, as the group hunts for a new CEO.
AUGUST 2016: Sports Hub hosts the National Day Parade (NDP) for the first and only time, amid clashes over the cost of hosting more rehearsal days.
The NDP held in the Sports Hub had a bill of S$39.4 million. This is more than double the bill for the parade and show held at The Float@Marina Bay in the past years, and costing just S$1 million less than Singapore's 50th jubilee held at the Padang in celebrating its independence the year before.
The show is also marred by a software defect that prevented an image of the Singapore flag from being projected on the domed roof during the finale as planned.
Beyond that, crowd favourites such as the Red Lions parachutists and the mobile marching column were not featured in the show due to the design of the stadium.
MAY 2017: Sports Hub CEO Manu Sawhney resigns amid complaints of management style and commercial decisions, 19 months into the job.
OCTOBER 2017: Prime Minister Lee announces that The Float@Marina Bay will be the permanent place for Singapore to host the NDP, outside of those held at the Padang every five years.
It would be redeveloped as a permanent venue known as NS Square.
The move raises questions over whether this will make it an uphill task developing the National Stadium into an icon like the old stadium it replaced.
JANUARY 2019: Sports Hub CEO Oon Jin Teik quits a year after being appointed to the job, reportedly over disagreements with the board. Acting CEO Bryn Jones takes over.
AUGUST 2019: Ms Grace Fu, Minister for Culture, Community and Youth, says in Parliament that there is room for improvement for the Sports Hub when asked about the review to the public-private partnership model.
FEBRUARY 2020: The CEO position at Sports Hub passes to former Singapore Tourism Board chief executive officer Lionel Yeo.
MARCH 2020: Sports Hub is fined for unmet standards, Parliament reveals. The consortium was required to meet a minimum number of sporting event days at the National Stadium and Singapore Indoor Stadium each year, and penalties were imposed if it did not meet these standards.
JUNE 2022: SportSG announces that it is taking over the ownership and management of the Sports Hub from SportsHub Pte Ltd.