On Jun. 10, the government announced its decision to take over the Singapore Sports Hub from the Sports Hub Pte Ltd (SHPL), which was previously under a Public-Private Partnership (PPP) agreement.

The termination of the agreement, which was originally a 25-year contract engaged in 2010, would allow SportSG to gain greater control and flexibility over the facility in Kallang and make it more accessible to the public.

On the same day of the announcement, Minister for Culture, Community and Youth Edwin Tong shared that the takeover would take Singapore's sporting and lifestyle ambitions "to a new level".

As the Sports Hub is an "iconic national sporting asset", and the "Home of Singapore Sport", he also intends for it to bring in more community sport programs and school events, and for it to be open to the everyday Singaporean.

Reasons for termination

On Aug. 1 in a ministerial statement in Parliament, Tong elaborated more about the reasons behind the termination of the PPP.

As he previously mentioned in his Facebook post on the day of the announcement in June, the takeover was due to a "confluence of several reasons".

Not enough community vibrancy

Tong shared that firstly, the arrangement "falls short of promoting sufficient community vibrancy" at the Sports Hub.

The arrangement with SHPL was successful in building up Sports Hub as a world class sporting infrastructure which 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 "did not 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 its calendar of events and programming fell short of what we had envisaged, even taking into account the private sector interest in this project."

Apart from the Super Rugby event held from 2016 to 2019, SHPL did not secure any recurring or marquee sport events at the Sports Hub on a multi-year basis.

More importantly, Tong said that the government would have liked to see more grassroots and school events held at the Sports Hub, even if these events might not have any commercial returns.

Instead, the agreement with SHPL was more profit-driven. This might have worked well during the construction phase of the project, but "was not sufficiently aligned in the current phase of the project", which has a greater emphasis on community programmes.

Tong cited an example where SportSG faced resistance in bringing in community sports programmes such as ActiveSG academy programmes as these were not revenue-generating.

Due to the nature of the project's terms, the costs of hosting school sport events would also have to be borne by the schools themselves.

The government felt that adjusting the KPIs of the agreement would be too difficult, and completely terminating the PPP and taking over "on a clean break basis" would be more efficient.

An integrated sporting and entertainment ecosystem at Kallang

The government plans for the Sports Hub to be made more accessible to Singaporeans by planning events such as regular Sports Hub Open Houses. SportSG is also working with the Ministry of Education (MOE) to host more National School Games there.

These plans will be complemented by the current plans to develop the Kallang area around the Sports Hub into a larger sporting and entertainment hub.

Dubbed Kallang Alive, the 89-ha site will be transformed into a vibrant sport, entertainment and lifestyle precinct by 2030.

Under this plan, the sporting facilities around Sports Hub — such as the Kallang Football Hub and the Kallang Tennis Centre — will be expanded, developed, owned and operated by SportSG.

Tong shared that the vision is to transform the entire Kallang Alive precinct, including the Sports Hub, into an integrated ecosystem which can:

1) host world-class events;

2) be a home ground for national athletes to train and compete;

3) be the heart of community, grassroots and school sports and;

4) be a testbed for sports innovation and growth.

Greater maturity now

The third reason Tong cited for the takeover of the Sports Hub is the maturation of the wider sporting and entertainment ecosystem in Singapore.

When the government first announced plans for the redevelopment of the National Stadium into the current Sports Hub in 2003, Tong admitted that it lacked the sufficient expertise to transform the Sports Hub into the cutting-edge facility it was envisioned to be.

This was the reason the PPP arrangement was agreed upon instead of a traditional procurement method where the government pays the capital upfront and runs the project on its own, or gets a service provider to do so.

"Thus, besides needing to tap on market leading experts, with not only the right technical expertise to build the infrastructure, we also needed the experience and connections of someone with international sporting and entertainment networks."

Since then, Singapore's internal capabilities in this industry have grown, and companies here have matured.

Demand for large-scale sporting, lifestyle and entertainment events has also risen.

Tong concluded that taking over the Sports Hub was not a quick and easy decision, but the result of various factors.

"Overall, the limitations of the current arrangement, the changing environment, and our growing capabilities and ambitions, are all  factors we considered when deciding on terminating the relationship. And I would add that this was not a decision taken lightly. We felt that, however, having done our due diligence, as I explained at the start, and a confluence of all these factors in the ecosystem all coming together, the time was now the right time for the government to exercise its right to step in, take ownership and continue management of the Sports Hub."

SHPL staff to be retained

Tong revealed that a team of SportSG officers will soon move into the Sports Hub holding company to manage the facility full-time.

Existing SHPL employees will also be retained, and will have the opportunity to join the new Sports Hub company.

Moving forward, the government will continue working and partnering with the private sector in the areas of programming, broadcast, hospitality, facilities upkeep and management.

The current contracting model will thus be retained, which would allow Sports Hub to work with "market-leading, optimal partners to provide the best services and facilities".

In the mid to longer term, the government also intends to tap into the private sector, to explore the prospects of redeveloping some parts of the Kallang Alive precinct.

Top photo from Sports Hub / FB