Changi race track: Finance hurdle ahead?

Straits Times 24 Jan 10;

The finish line is within sight - but do all three bidders have a 'full tank' of money?

As things stand, the Singapore Sports Council (SSC) will announce by March its choice of consortium to build, finance and manage a permanent race track in Changi.

But there are signs of a road hump facing one of the three bidders in the contest to run the Changi Motorsports Hub.

Sources said the group led by Singapore Agro Agriculture (SAA) has recently been tapping the financial sector for funds.

'To be doing this at such a stage of the bidding process does seem odd,' said an insider who has been following the project since it was announced in October 2007.

If the winner lacks secured funding - which must come from the private sector - it could lead to delays to the facility's completion.

This is slated for late next year.

Another mega facility - the $1.87 billion Sports Hub in Kallang - was hobbled by financing issues after the Singapore Sports Hub Consortium (SSHC) trumped bids from two other groups in January last year.

It failed to garner enough loans because of the recession but the financing issue has since been cleared up.

The Changi project, which will occupy a 41ha site, will include space for restaurants, bars and shops. It is expected to cost between $200 million and $300 million to build.

The other two bidders are Sports Services, backed by public-listed leisure and health-care products firm Haw Par Corporation, and SG Changi, fronted by Jurong Kart World.

The Sunday Times spoke to Mr Jason Wong, chief operating officer of SAA Holdings, which is also behind food-and-retail hub Turf City.

'I'm in the middle of doing this and just spoke to SSC about the matter. I can't talk about this now so don't bring it up again,' said Mr Wong last Wednesday, when asked about financing.

Haw Par executive director Chng Hwee Hong and SG Changi director Thia Yoke Kian separately said they had secured the funds.

Mr Chng said the money would come entirely from within the company.

Mr Thia's group will bank on a mix of its own funds and equity from financial institutions.

SSC spokesman Alvin Hang said that as the bids are still being evaluated, it would be inappropriate to comment on market speculation.

It is understood that SSC had put in a requirement for bidders to have funding secured before they submitted their design proposals last August.

But this was apparently removed just before the bid period closed, so as to drum up more interest during a recessionary year.

The Motorsports Hub is seen as crucial to revving up Singapore's aspirations to be an international motorsports destination. The country has already hosted two Formula 1 races.

The winning bidder for the Changi hub will have to stage several prestigious races annually, including MotoGP - motorcycling's equivalent of F1.

Meanwhile, work is expected to commence later this year on the Sports Hub, with completion slated for late 2013 or early 2014.

There has been significant interest from banks since the SSHC launched a competition to raise funds last year.

It is evaluating the proposals and aims to sign the final contract by mid-year.

Speculation over when the National Stadium will be demolished should finally be laid to rest then.

Leonard Lim