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Legislative Assembly for the ACT: 1999 Week 7 Hansard (30 June) . . Page.. 1774 ..
MR STANHOPE (continuing):
The developers will source finance for more than half the construction costs and project manage the redevelopment ... The ACT Government will contribute just over $12m to the project. The remaining finance will be sourced by CRI, which has begun negotiations with potential stadium users and service providers.
CRI's chairman, Mr Peter Wills, told the Financial Review that the company's experience in having been a bidder for Stadium Australia "really equipped us with knowing where the income sources are for projects such as this". Mr Wills said that potential income from stadium users, service providers and advertising and sponsorship deals "would underwrite the remaining $15m in finance".
On 29 May, the Canberra Times reported that contractors had been short-listed for the redevelopment construction contracts. According to the Canberra Times:
The ACT Government will pay $12.3m toward that project and has said it expected the developers would come up with a range of options to find the rest of the money.
Quite clearly, both the Government and CRI had an understanding that the company would have an important responsibility in organising the private sector finance. Of course, the private sector finance never arrived. With that failure, the Government's Olympic vision was in trouble, and it came right from the start. The up-front revenue never arrived, it never materialised. Three times during the life of this project attempts to find private sector backing have collapsed. The Assembly does need to know why, if members are to understand the extent of the Government's incompetence in this matter.
Mr Speaker, the as yet unanswered question is why the up-front revenue did not eventuate. We do know that the original business plan prepared by Graf International was based on wild and unsustainable crowd figures - average attendances in excess of 18,000 for the Raiders, 16,500 for the Brumbies and 10,000 for the Cosmos. This business plan was subsequently described as rubbish by the Chief Minister in the Estimates Committee hearing on 25 May this year. It is a business plan rewritten as many as 12 times in its two-year history. Why, and by whom, was it ever accepted in the first place?
Despite the shaky basis of the crowd and revenue assumptions in the first iteration of the business plan, the up-front money remained critical. Without the money, there would be no expenditure beyond the Government's $12m, according to the Chief Minister, whose spokesman was reported in the Canberra Times of 25 October 1997 as saying:
The additional $8m expenditure [over the Government injection and $7m guaranteed loan] will be financed from upfront sales such as signage and corporate suites. That expenditure will only be authorised on the basis of dollars-in equalling dollars-out.
But the up-front money did not eventuate and the dollars out continued to flow. Initially, there was money appropriated to cover the contractor payments; $5.6m was set aside as a capital injection for works at Bruce Stadium in the 1997-98 budget.
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