On June 10, the government announced its decision to acquire the Singapore Sports Hub from Sports Hub Pte Ltd (SHPL), previously under a public-private partnership agreement (PPP).
The termination of the agreement, which was originally a 25-year contract entered into in 2010, would allow SportsG to gain greater control and flexibility over the Kallang facility and make it more accessible to the public.
On the same day of the announcement, Culture, Community and Youth Minister Edwin Tong said the acquisition would take Singapore’s sporting and lifestyle aspirations “to a new level”.
As the Sports Hub is an “iconic national sports asset” and the “Home of Singapore Sport”, it also plans to introduce more sports programs and school events in the community and open it up to the everyday Singaporean.
On August 1, Tong expanded on the reasons behind the termination of the PPP in a ministerial statement to parliament.
As he previously noted in his Facebook post on the day of the announcement in June, the acquisition was due to a “confluence of several reasons”.
Not enough liveliness in the community
Tong shared that, first, the scheme “fails to promote sufficient community vibrancy” at the Sports Hub.
The agreement with SHPL was successful in building Sports Hub as a world-class sports infrastructure that had won international awards for its design, and hosted major international events such as the International Champions Cup and BTS and Coldplay concerts.
However, it “didn’t do well” when it came to promoting and enhancing the vibrancy of community sports and lifestyle activities at the facility.
“The quality and volume of the events calendar and programming were not what we expected, even taking into account private sector interest in this project.”
Aside from the Super Rugby event which was held from 2016 to 2019, SHPL has not hosted any recurring or major sporting events in the Sports Hub on a multi-year basis.
More importantly, Tong said the government would have liked to see more primary and school events held at the Sports Hub, even though these events may not have a commercial return.
Instead, the deal with SHPL was more profit-oriented. This might have worked well during the construction phase of the project, but “wasn’t tuned enough in the current phase of the project,” which places a greater emphasis on community programs.
Tong cited an example where SportSG encountered resistance to bringing in community sports programs, such as ActiveSG Academy programs, because they do not generate revenue.
Due to the nature of the project’s terms and conditions, the costs of organizing school sports events should also be borne by the schools themselves.
The government was of the opinion that adjusting the KPIs of the agreement would be too difficult and would be more efficient to end the PPP completely and take over ‘on a clean break basis’.
An integrated sports and entertainment ecosystem in Kallang
The government plans to make the Sports Hub more accessible to Singaporeans by hosting events such as regular Sports Hub Open Houses. SportSG also works together with the Ministry of Education (MOE) to organize more National School Games there.
These plans will be complemented by current plans to develop the Kallang area around the Sports Hub into a larger sports and entertainment center.
The 89-hectare site, called Kallang Alive, will be transformed into a vibrant sports, entertainment and lifestyle district by 2030.
Under this plan, the sports facilities around Sports Hub – such as the Kallang Football Hub and the Kallang Tennis Center – will be expanded, developed, owned and operated by SportSG.
Tong shared that the vision is to transform the entire Kallang Alive district, including the Sports Hub, into an integrated ecosystem that:
1) organizing world-class events;
2) be a home for national athletes to train and compete;
3) being the heart of the community, primary and school sports and;
4) be a testing ground for sports innovation and growth.
Greater maturity now
The third reason Tong cited for the acquisition of the Sports Hub is the maturation of the broader sports and entertainment ecosystem in Singapore.
When the government first announced plans for the redevelopment of the National Stadium into the current Sports Center in 2003, Tong admitted it lacked the expertise to transform the Sports Center into the state-of-the-art facility it envisioned.
This was the reason that the PPP scheme was agreed instead of a traditional procurement method where the government pays the capital upfront and carries out the project itself or has a service provider do it.
“So we had to leverage not only industry-leading experts with not only the right technical expertise to build the infrastructure, but also the experience and connections of someone with international sports and entertainment networks.”
Since then, Singapore’s internal capabilities in this industry have grown and the businesses here have matured.
Demand for large-scale sports, lifestyle and entertainment events has also increased.
Tong concluded that the acquisition of the Sports Hub was not a quick and easy decision, but the result of several factors.
“Overall, the limitations of the current arrangement, the changing environment and our growing capabilities and ambitions are all factors that we took into account when deciding to end the relationship. And I would add that this was not a light decision. We felt that, but after doing our due diligence, as I explained at the beginning, and a confluence of all these factors in the ecosystem all coming together, now was the right time for the government to exercise its right to intervene, take ownership and continue to operate the Sports Hub.”
SHPL staff to retain
Tong revealed that a team of SportSG officers will soon be moving to the Sports Hub holding company to manage the facility full-time.
Existing SHPL employees will also be retained and given the opportunity to join the new Sports Hub company.
Going forward, the government will continue to work and cooperate with the private sector in programming, broadcasting, hospitality, facility maintenance and management.
This maintains the current contract model, allowing Sports Hub to partner with “market-leading, optimal partners to deliver the best services and facilities”.
In the medium to longer term, the government also plans to tap into the private sector to explore prospects for the redevelopment of some parts of the Kallang Alive district.
Top photo from Sports Hub / FB