Sports body says builder must keep to December deadline; project hit by series of woes
Christopher Tan Straits Times 24 Jun 11;
THE Government is sticking to its deadline for the completion of Singapore's first permanent motor racing circuit in Changi despite growing signs that the $380 million, problem-riddled project may remain stuck in neutral gear for several more months.
Asked for an update on the project, the Singapore Sports Council (SSC) would say only that it expects the builder to keep to its year-end deadline.
The project was announced in October 2007 and awarded to Japanese-Singapore consortium SG Changi in March last year.
The Straits Times understands that SG Changi faces hefty penalties - between $20,000 and $50,000 in damages a day - or could even have its contract rescinded if it fails to deliver on time.
SSC chief financial officer Goh Fang Min said the consortium had made specific commitments and 'we expect it to continue to comply with its commitments under the project agreement'.
'It is responsible for delivering the Changi Motorsports Hub by December 2011,' Ms Goh said, adding that the group had fully paid for the 41ha, 30-year leasehold land, sited next to the Singapore Airshow grounds. She said that in the meantime, the council was in discussions with relevant parties and 'different options will be carefully studied'.
Industry watchers said options could include opening the facility in stages - as has been the case for other major infrastructural projects which were delayed, including the MRT Circle Line.
SG Changi is believed to have paid just under $40 million for the land, a reclaimed plot at the Changi coast. Besides a 3.7km track that will host races such as MotoGP and Super GT, the facility is expected to have shopping and food and beverage outlets, a motor museum and a racing academy.
Plans are also afoot to build a 250-room hotel on site and develop a 400m stretch of beach fronting the track, after the latter is up and running.
With just six months to go, and hardly any work done, observers think chances of meeting the deadline are slim. SG Changi director Thia Yoke Kian agreed, saying finishing the project by December 'is definitely not possible'.
'We have to ask for an extension,' he said.
He added that the group had found a new investor, and that an announcement would be made soon. 'It is a reliable investor from Europe,' he said, refusing to give details.
The project has been beset with woes and delays from the start. The Government took almost three years to decide on a builder from a shortlist of three. Work began only last December, months after the contract was awarded in March.
Shortly after, talk that the group had cashflow problems surfaced, fuelled by the resignation of two of the project's four original shareholders - former racing driver Genji Hashimoto and Singaporean Eddie Loh. Then, the Corrupt Practices Investigation Bureau started a probe into alleged irregularities in the tender process for the project.
SSC deputy director Fan Chian Jen, who was in charge of the project, later left the body.
Piling - slated to be completed by last month - grounded to a halt in February, just weeks after it started, when SG Changi failed to pay piling firm CSC Holdings.
Amid the delay, more allegations of wrongdoing surfaced, with one levelled against SG Changi executive chairman Fuminori Murahashi for a purportedly forged bank guarantee. Mr Thia yesterday confirmed he had lodged the complaint against Mr Murahashi and was assisting the Commercial Affairs Department in its investigations.
The delay is seen as a cause for red faces within the SSC, which also had problems with another high-profile sports project. The $1.87 billion Sports Hub in Kallang, initially slated for completion this year, is now expected to be ready only in 2014. The project was temporarily derailed by the 2008 global financial crisis.
Singapore Motor Sports Association president Tan Teng Lip is keeping his fingers crossed that the Changi race track can become reality.
'I'm still hopeful that they can find a solution because the circuit is very important to us,' he said.
'So far, there has been no information. Everyone is very anxious about what's going on.'
