Nisha Ramchandani Business Times 9 Aug 11;
FOUNDATION specialist CSC Holdings' wholly-owned subsidiary, CS Construction & Geotechnic (CSCG), has officially terminated its contract with SG Changi, the consortium behind the beleaguered Changi Motorsports Hub project.
CSCG landed the $50 million contract last October but halted piling works on the 41-hectare site along Aviation Park Road in mid-January after SG Changi failed to meet outstanding progress payments.
With the brakes reportedly on since January and with CSCG now officially pulling the plug, it is looking highly improbable that SG Changi will be able to deliver on its agreement to have the Changi Motorsports Hub ready by end-2011, as originally stated.
'Amidst ongoing negotiations with SG Changi for a settlement, CSCG had successfully obtained adjudication determinations against SG Changi, under the Building and Construction Industry Security of Payment Act (Cap 30B), for the outstanding amounts owed, as well as court enforcement orders for the adjudication determinations,' CSC said in a release to the Singapore Exchange (SGX) yesterday, adding that the contract has been formally terminated.
CSCG had made a provision of $7.9 million for the financial year ended March 31, 2011, in respect of the total amount owed.
SG Changi director Moto Sakuma did not respond to queries from BT by press time.
Goh Fang Min, chief financial officer of the Singapore Sports Council (SSC), said: 'SSC understands the tight timeline for the project completion. We have been in touch with SG Changi on this. We have also been in discussions with the relevant parties and looking at different options.'
Ms Goh went on to say that SSC expects SG Changi to continue to comply with its commitments under the project agreement.
'We are monitoring the situation closely and will take appropriate actions at the right time,' she added.
SSC awarded SG Changi the tender to build and run the $380 million project for a 30-year period. As such, the project is to be fully funded by the consortium.
It has been a bumpy road for the project from the get-go, with construction first commencing later than expected last December.
Then, in January, it was reported that the Corrupt Practices Investigation Bureau (CPIB) was investigating the award of the tender to ascertain whether there had been any leakage of information during the tender process.
The news of the CPIB probe did not sit well with investors, who reportedly responded by freezing funds.
Along the way, the consortium saw changes to its management team, with former Japan GT driver Genji Hashimoto - previously SG Changi's managing director - leaving the group and Mr Sakuma coming onboard. The relationship between SG Changi's executive chairman Fuminori Murahashi and its director Thia Yoke Kian has also been strained in recent months.
In May, Mr Thia lodged a complaint against Mr Murahashi with the Commercial Affairs Department (CAD) alleging that a bank guarantee submitted as part of the tender process may have been forged.
Positioned as a platform to develop Singapore's motorsports industry, the project is to incorporate features such as a 3.7km racetrack, a 1.2km karting track as well as food-and-beverage and retail outlets.
Changi Motorsports Hub group gets ultimatum
Leonard Lim Straits Times 7 Sep 11;
THE troubled consortium building the Changi Motorsports Hub has been given until the end of this week to prove it has the funds for the $380 million project.
If SG Changi fails to do so, The Straits Times understands, its contract with the Singapore Sports Council (SSC) could be dead in the water.
The SSC sent SG Changi a final warning letter two weeks ago, SG Changi director Thia Yoke Kian told The Straits Times.
He said the SSC had previously threatened to pull the plug unless the consortium showed it had the funds to see the project through to completion.
Industry observers have speculated that if the consortium fails to prove it can carry on, a fresh tender could be called for another group to design, finance, build and manage the motor racing track.
But Mr Thia said: 'From what I understand, if the deal is off, there will be no more racetrack.'
The venue was intended to burnish Singapore's reputation as a regional motor sports destination, with the Republic already hosting the world's only Formula One night race.
SC Changi won the tender for the project in March last year, and started work in December.
The 3.7km track in the 41ha Changi Motorsports Hub was supposed to be ready by the end of this year and able to host any race barring Formula One.
Mr Thia, a Singapore businessman and former owner of Jurong Kart World, has a 35 per cent stake in the project.
The rest is in the hands of SG Changi executive chairman Fuminori Murahashi, who could not be reached for comment.
Mr Thia claimed to have an overseas investor willing to commit the necessary funding, but said his attempts to inform Mr Murahashi have been rebuffed.
The pair's relationship has been strained since the start of this year.
The SSC, which is overseeing the project, has not said what it would do if SG Changi failed to complete the project as expected.
The project has been dogged by various problems and delays since it was first announced in 2007 and after work finally began last year.
News broke in January this year that the Corrupt Practices Investigation Bureau (CPIB) had begun probing alleged irregularities in the hub's tender process.
An SSC director in charge of the project, Mr Fan Chian Jen, left the body.
Private-sector investors then froze their funding, saying they wanted the all-clear from the CPIB first.
Beset by financial problems, SG Changi missed paying a $10 million instalment to piling company CSC Holdings, which stopped work and last month ended its $50 million contract with the consortium.
In May, the Commercial Affairs Department launched an investigation into a purportedly forged bank guarantee used in the tender process.
A consortium that lost the bid to SG Changi has not ruled out trying again if a new tender is called.
Mr Chng Hwee Hong, executive director of Haw Par Corporation and head of the Sports Services consortium, said: 'If there is a chance, why not?
'But, going back to the fundamentals, it must be economically viable. We'll have to see the terms of the tender.'
Motorsports fans upset as hub plan stalls
They are keeping fingers crossed that hub will still be built despite SG Changi woes
Leonard Lim Straits Times 8 Sep 11;
FANS, officials and motorsports racers here are dismayed that, after getting their longstanding wish for a permanent race track granted, the project seems to have skidded to a screeching halt.
But they remain hopeful that the $380 million Changi Motorsports Hub will still be built - somehow, following news that the allegedly cash-strapped consortium that was to build the facility has been asked to show that it can see the project through.
For economist Song Seng Wun, the prospects of seeing MotoGP champion Valentino Rossi race here are rapidly dimming.
'I'm sad. I was hoping he'd race here before he becomes a drift driver or something,' said the fan of the Italian motorcycle-racing star rumoured to be moving to other forms of racing soon.
Go-kart racer Cheryl Tay, 24, lamented: 'Without a track, the motor sports scene will stagnate and it will be tough to develop talent.
'Now, we have just one karting track in Jurong and a few carpark events. It's a disgrace the project has come to this.'
The hub, allotted a 41ha, sea-facing site near the Singapore Airshow grounds, was to have been completed by the end of this year - in time for it to host races like the 2012 season of the MotoGP, motorcycling's equivalent of the Formula One (F1).
But it is understood that SG Changi, the consortium which beat two others in March last year to build, finance and run the hub, was sent a warning letter two weeks ago by the Singapore Sports Council (SSC).
It is believed SG Changi will respond today to the SSC, the overseeing body, to show whether and how it can complete the project.
Mr Song believes the hub is a project worth completing for the economic boost it will bring in the longer term. He said: 'There's a growing middle-income group and discretionary spending in Asia is set to rise. This allows people to spend on leisure and travel, and there'll be a demand for motor sports events.'
SG Changi has been trying for months to keep the project afloat, even as investors were spooked by reports in January that the Corrupt Practices Investigation Bureau was probing alleged irregularities in the tender process.
The following month, work on the site was halted when SG Changi missed a $10 million instalment to a piling company. The site stands virtually empty now.
The SSC has been mum on the action it may take against SG Changi for failing to show it has the funds. This has fuelled speculation that a fresh tender will be called - or worse, that plans for the motorsports hub will be mothballed.
At least two parties, Haw Par Corporation and Group Exclusiv, are not ruling out submitting bids if a second tender is called; there is talk that a listed China company is also keen.
Singapore Motor Sports Association president Tan Teng Lip urged the SSC to make clear what will happen if SG Changi cannot find the funds: 'Everybody is in the dark and guessing, and this is adding to the anxiety. I just hope the Government will not scrap the whole thing. If it does, it would be unfortunate.'
The hub would have been the 'spiritual home' for the motorsports community here which is estimated to number in the thousands.
According to plans, the facility would comprise a 3.7km track for any kind of race except the F1, a 1.2km go-karting track, food and beverage outlets, a grandstand, a racing academy, an entertainment complex, a motorsports museum and exhibition centre.
Interest in fast cars and racing has been on the rise since Singapore began hosting the world's only F1 night race in 2008. While the annual F1 race brings in an estimated $100 million in direct tourism benefits, figures for the hub's events, which must include at least three international races like MotoGP, are unlikely to come even close.
Mr Song said: 'These events have less of a following and the level of television sponsorship shows they are second or third cousins to F1.'
But their popularity is growing, he said: 'The Changi track is still very much something which should be supported. It's unfortunate the current group has got stuck with financial problems.'
The glitches call to mind those that plagued the $1.87 billion Sports Hub in Kallang, another high-profile SSC project. It was to have been completed last year. But delays, including the consortium behind it being derailed by the 2008 global financial downturn, have pushed its completion date to 2014.
Motorsports hub still on track, says SG Changi
Funding believed to have been secured; shareholder is ousted
Leonard Lim Straits Times 9 Sep 11;
THE consortium behind the Changi Motorsports Hub reiterated its commitment to the project in a letter to the Singapore Sports Council (SSC) yesterday.
It is believed that the financially beleaguered group, SG Changi, has secured funding for the $380million facility.
But with a deadline of end-2011 for construction to finish now virtually impossible to meet, it is believed that SG Changi has proposed a new schedule that will see the bulk of the privately funded hub ready next year.
Work on the hub, the centrepiece of which is a 3.7km track capable of hosting any race except Formula One, stopped in February after SG Changi missed a $10million instalment to a piling company.
The SSC remained tightlipped on the matter yesterday, but a formal announcement by SG Changi is expected in a few days.
In a fresh twist yesterday, one of the consortium's two shareholders, Mr Thia Yoke Kian, was ousted.
He had apparently signed an agreement in July last year to take a 35 per cent stake in the project, and had promised to pay up $1.05 million - what he said was the value of his share in the hub - within a year.
Mr Thia has yet to stump up the cash. He received a court order on Wednesday.
Since the start of this year, he has had a rocky relationship with SG Changi executive chairman Fuminori Murahashi, who holds the remaining 65 per cent interest in the project.
Mr Thia said yesterday: 'Yes, I haven't paid. I'll just give the shares back to them. I don't want to do this project any more.'
He is now also no longer a director of the consortium.
Referring to reports that the group had been seeking funding in the last six months, he added: 'I have investors who were willing to commit funding, but SG Changi didn't want to talk to me.'
Things had looked rosy when the group was picked by the Government ahead of two other bidders in March last year to design, finance and manage the hub for 30 years.
SG Changi was a partnership between Singapore and Japanese businessmen, primarily a tie-up between Mr Thia, the former owner of Jurong Kart World, and Mr Murahashi, who has been involved in Japanese motorsports.
Work started only last December, despite SG Changi wanting to begin within three months of winning the tender.
Reports the following month that the Corrupt Practices Investigation Bureau (CPIB) was probing alleged irregularities in the tender process then spooked investors who had committed funding.
Mr Thia was investigated by the CPIB, and an SSC director in charge of the project, Mr Fan Chian Jen, quit.
In May, Mr Thia lodged a complaint against Mr Murahashi with the Commercial Affairs Department, alleging that a bank guarantee submitted as part of the tender process may have been forged.
And last month, piling company CSC Holdings officially terminated its $50million contract with SG Changi.
The hub is supposed to enhance Singapore's reputation as a motorsports destination, with the annual Formula One already counting Singapore as one of its most popular venues in the 19-leg season.
Apart from a permanent track which can host top races like MotoGP and Japan's Super GT, the facility will have a 1.2km karting track, food and beverage outlets, a motor museum and a racing academy.
SG Changi hope for a lifeline for motorsports hub
Ian De Cotta, TODAY Channel NewsAsia 9 Sep 11;
SINGAPORE: In a last-minute scramble, SG Changi - the consortium contracted to build the Changi Motorsports Hub - submitted the names of two new investors and a revised timeline to the Singapore Sports Council (SSC) on Thursday.
While the original contract stipulated the facility would have to be operationally-ready by the end of this year, the new schedule will see 80 per cent of the project completed by next June.
At press time on Thursday night, an SG Changi insider said company directors Fuminori Murahashi and Moto Sakuma were still in the midst of finalising deals with the new investors.
The consortium rushed to meet the deadline to answer a show-cause letter issued by the SSC a fortnight ago, after work on Singapore's first permanent race track stalled.
Construction ground to a halt in January when contractors CSC Holdings failed to receive an advance payment of S$10 million for piling work totalling S$50 million.
They only received S$7 million and pulled out of the project last month.
When contacted on Thursday night, SSC's director of corporate communications and relations, Alvin Hang, revealed they had received submissions from SG Changi.
"We received it at 7.45pm and will be reviewing their submissions," said Hang.
SG Changi were embroiled in difficulties when one of their original directors, Thia Yoke Kian, was called up by the Corrupt Practices Investigation Bureau last November in a probe into possible irregularities in the tender process.
According to the insider, Thia, who had failed to pay for the 35 per cent shares he owned in SG Changi, was removed as director of the company on Aug 27.
"They removed Thia as director of the company and have delivered an affidavit to him that is asking for a summary judgment from the courts on Oct 20," the source said.
When contacted on Thursday, Thia said: "Yes, they dropped me as a director and I will be returning all my shares to them."
Right now, the two directors in the company are Murahashi and Sakuma, who together hold 65 per cent of the shares.
Many motorsports enthusiasts fear the project will be dumped if the last ditch attempt by SG Changi fails.
But, according to sources, a re-tender is likely to be called, after the authorities engage various stakeholders and potential investors seeking their views.
And in the revised timeline, the facility could be up by 2014.
Singapore Agro Agriculture and Haw Par Corporation, who lost out to SG Changi last year to build the hub, have previously said they were still interested in the project.
Arthur Tay, chairman of ONE°15 Marina Club, headed a group that withdrew their tender at the last minute.
Speaking to TODAY, he said: "We have the integrated resorts and the Sports Hub is coming soon, and as a regional hub of sorts we need a place for motor racing. There is a growing interest in the sport after the arrival of Formula One and people need a place where they can indulge in it. I am still interested in the project but the terms and conditions need to be revisited for it to be viable for us."
Apart from building a motorsport culture, a permanent track has economic spin-offs, according to Kevin Kwee, executive director of Group Exklusiv.
"A vibrant motorsports calendar will not only trigger the growth of auto-related industries but create jobs even in tourism," said Kwee, who decided not to make a bid after initially expressing an interest in the project.
"We do need a place to help young talent and the number who have taken to motor racing is increasing." - TODAY
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