Cancellation of International Events due to Problematic Pitch at National Stadium

Mr Pritam Singh asked the Minister for Culture, Community and Youth what steps will be taken to avoid a repeat of the episode where the National Stadium pitch was deemed to have fallen short of international standards during the soccer friendly between Brazil and Japan on 14 October 2014.

Madam, Members have expressed concerns about the condition of the pitch at the National Stadium and its impact on Singapore's reputation, and I share

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these concerns.

Under the public-private partnership (PPP) arrangement, Sports Hub Pte Ltd (SHPL) designed, built, financed and operates the new Singapore Sports Hub for 25 years. The intent of the PPP is to leverage the private partner's expertise and network to create a vibrant mix of sports and lifestyle activities that would be accessible to all. SHPL is required to make available the various facilities in the Sports Hub for public and private use, according to the specifications and standards detailed in the Project Agreement between SHPL and Sport Singapore (SportSG).

Developing a major sporting venue in land-scarce Singapore does present several unique challenges. Many stadiums around the world are designed for a specific purpose and they are not used intensively all year round. This is perhaps possible in countries which do not face space or land constraints. In Singapore, it is a luxury we cannot afford. As such, SHPL was asked to deliver a multi-purpose Sports Hub, which could accommodate a vibrant calendar of sports and entertainment activities. By and large, I would say that the expertise brought in by SHPL has helped to make the Sports Hub an integrated sports and lifestyle destination for Singaporeans to enjoy.

However, it has faced problems with the National Stadium pitch because of several reasons. For one, SHPL had taken three months longer than expected to complete the National Stadium and this meant that there was not enough time to allow the grass on the pitch to take root and stabilise. In addition, SHPL misjudged the impact that the intensive events schedule would have on the pitch. It had carried out testing before deciding on the hybrid Desso GrassMaster pitch. This is a hybrid pitch which is primarily natural turf anchored by artificial fibres. It procured a cover that was designed to allow activities and concerts to take place on the pitch with reduced impact on the grass. This had been tested but it did not work out as planned, and in part because the grass was not anchored deeply enough. It did not have time to grow and anchor itself deeply enough, and so, as a result, the repeated use and coverage of the pitch ended up damaging it.

SHPL recognises that the poor condition of the pitch and the changes in the event schedule have brought about negative publicity to the project. This is also not in the consortium's own interests and, hence, it has stepped forward to take ownership of the issue. It has acknowledged its own shortcomings and it has embarked on the necessary remedial actions to improve the condition of the pitch.

Earlier, SHPL had procured growth lights at its own cost to enhance the growth of the grass. And after the recent Brazil-Japan match, the Asia Pacific Dragons – Maori All Blacks rugby match was cancelled and the Jay Chou concert postponed and this was done to give the pitch more time to stabilise before the coming AFF Suzuki Cup in November. SHPL is

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bearing the costs arising from the cancellation and postponement of these events.

With the freeing up of the events schedule and the measures put in place so far, we have already seen improvements in the pitch conditions. At the same time, SHPL has been engaging local and overseas experts to fundamentally re-examine its earlier assumptions and models for the use of the pitch. They will assess if the current pitch solution is viable beyond the Suzuki Cup, or whether more extensive changes are needed in the medium to longer term to ensure a consistently robust pitch. These are still being studied, and SHPL intends to put in place longer term measures after the Suzuki Cup.

SportSG will continue to monitor the situation and ensure that SHPL does everything that is necessary to establish a top quality pitch for the National Stadium.

Thank you, Madam. I would like to ask the Minister how was the Government involved in deciding the type of pitch used for the National Stadium? Was the Government consulted before this hybrid was decided? In resolving this issue now, how is the Government working with SHPL to settle this issue and what is the time frame that the Minister expects this pitch to be restored to the expected standard?

The Minister mentioned that as part of the PPP, the Sports Hub has to cater for public use. So, during this period where the pitch is not satisfactory, what are the public events that would be affected and how would this affect the PPP arrangement? How would SHPL be taken to task for not fulfilling its end of the agreement?

Madam, as I have mentioned earlier, the requirement is stated in the project agreement that spelt out between SportSG and SHPL. SHPL is required to deliver on certain outcomes, so it has to take upon itself the responsibility of ensuring the pitch allows for multi-purpose usage and is robust enough to withstand that usage.

In the course of coming up with the present solution, SHPL had done a series of tests and these test results were shown to Sports Singapore to show that these tests were done and that the proposed solution that was eventually put in place was the best solution that they had, based on the conditions that they had tried out earlier. Of course, as I have mentioned, we know now that it has not worked out as planned, not necessarily because the proposed solution is not the desired one but perhaps there were other extenuating circumstances – as I had mentioned, the project was late and the grass itself had not had time to stabilise before it had to deal with a very heavy event schedule.

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The current arrangement or presently, even with the postponement of the events in the coming months and the time that has taken to allow the grass to grow, we have already seen significant improvements in the pitch. This is something that is being done in the interim, for the Suzuki Cup. Beyond that, there is now a process of going through some of the earlier test results all over again – just to ensure that the solution that is being proposed is truly robust. And this is again a process which we have asked SHPL to undertake. They will do a series of experiments and tests to assure all stakeholders that they have a robust solution for the medium and long term. They will be sharing the results with the Government, with SportSG. We are also asking our own experts, for example, from the National Parks to look at the results and to satisfy ourselves that whatever the solution as proposed by SHPL is a robust one.

On private and public use, the public use will pertain to events like the National Day Parade, for example. Not that it is going to be happening next year in the Stadium, but if something like that were to happen, that would be an event that is for public usage. So, in the near term – between now and December or early next year – we have no public events that are in the calendar.

I would like to thank the Minister for his reply. Mdm Speaker, page 58 of the MOF's Public/Private Partnership Handbook states that the misallocation between the PPP provider, in this case, SHPL, and the Government procuring entity, namely, SportSG, is complex and SportSG must be careful that operational risks are not passed back to them.

Separately, there was also the media statement from SportSG suggesting non-payment if the condition of the pitch does not improve – I believe this was issued shortly after the Brazil-Japan Friendly match.

I have three supplementary questions for the Minister. First, what is the annual payment that SportSG pays to the Sports Hub under the PPP framework and how are the payments structured over the re-payment period? Secondly, under what circumstances can SportSG contractually withhold annual payment to the Sports Hub and how much can it withhold for non-performance? And finally, in view of the Suzuki Cup ticket prices that were released yesterday, what role does SportSG and the Sports Associations play to determine the pricing of events with potential mass appeal and what recourse does SportSG have to ensure that ticket prices are not out of reach for the mass public?

Madam, with respect to the questions, on the annual payment, I do not have a figure at hand but I would say that the annual payment is over a stream of a period of time which eventually would amount to the overall cost of the project. The overall

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cost of the project is something at a region of $1.3 billion.

As a PPP, instead of forking out $1.3 billion upfront, the Government does not do that. It is done by the private sector but we, instead, pay an annual stream of payments over the 25-year period for the usage of the stadium; of the facilities within the Sports Hub. That is how it is designed and constructed.

Within the project agreement, there is indeed a provision for deductions in the availability payment in the event of non-performance or non-availability of use. And this is quite standard in a PPP arrangement. Even in a mature PPP in other countries, you will often find deductions being made in the event of a non-performance by the private partner. This is something that SportSG will carry out in accordance with the provisions in the project agreement.

On ticket prices, that is something that would be set by event organisers, not necessarily by Sports Hub itself because the events that are taking place in the Sports Hub may be put up by a National Sport Association, it may be put up by SportSG, it may be put together by a private events promoter. These are not regulated prices; these are left to the market. So, the property owners and the event organisers, which are usually commercial organisers, would then have to decide what is the appropriate price range to set these prices.

I would say if you look at the experience so far and compare with what we have seen in Jalan Besar Stadium, what we have seen in the old national stadium for the events and for the sporting activities that we have had in the Sports Hub, I think they are within a comparable range. For example, the Brazil-Japan match ticket prices were comparable to what was in the old national stadium when Liverpool came to play in the old national stadium. We have had many sporting events within the new Sports Hub organised by our National Sports Associations where ticket prices are very affordable and accessible to all Singaporeans.

A clarification for the Minister. I am heartened to note that SHPL is taking ownership and taking steps to ensure that what happened before would not happen again. However, if the maintenance and the management continue to be unsatisfactory from the perspective of Singapore's reputation, then is there an exit clause that enables SportSG to treat the non-performance or the failure of obligation as a breach of contract and award the management to another entity?

Madam, I thank the Member for the question on this worst case scenario that SHPL is unable to perform. I would, first of all, want to clarify that as a consortium, they have taken ownership and responsibility. They are already, as you can see, putting in their own investments – whether it is in the purchase of growth lights; whether it

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is in the rescheduling of events – they are already taking these decisions to ensure that the pitch is done properly. That is something we should acknowledge that the consortium may have fallen short in the first instance with this pitch at the early stages, but they have taken ownership and they are now putting in the necessary remedial measures.

I would also say that it is not such a straightforward matter to get it right, right from the start, because in many of these stadiums around the world, in big venues, there is always an initial bedding process, a teething process where you have to go through some of these humps. That is something that I think they are facing now. The good news or the thing that I am assured by is that the consortium is taking full ownership and responsibility of the issue.

But if it should come to pass that there is such a scenario where there is truly non-performance, the consortium for some reason or another is not doing anything to solve the problem or if it is a very bad breach of the terms of the project agreement, then indeed there are exit provisions that we can activate. I do not think they are anywhere near that in this particular case.

Thank you, Mdm Speaker. I think National Stadium is the first such PPP project for sports facilities of this scale. When we say PPP, it means Government is also involved. I would like to ask two supplementary questions. During the construction of the National Stadium, was the expertise of Government agencies being sought? In this particular case, was the expertise in NParks being involved during the construction stage, for example, selection of the grass and so on?

The next question is that, according to the media report, CEO of SportSG threatened or mentioned the possibility to withhold payment. I would like to ask is this non-payment allowed for in the contract and will this cause any strain in the relationship because this is a PPP project?

Madam, let me take the second question from the Member first. The non-payment and the deduction of availability payment, as I have said earlier, is part and parcel of all PPP projects, not just in Singapore. Anywhere in the world there is PPP project, these sorts of provisions are there and happen all the time.

So it is in our case. There are provisions for deduction in the availability payment. This is spelt out in the contract. We have had many meetings since the statement made by SportSG and many meetings and discussions between SportSG and SHPL. There is no strain in the relationship. The consortium understands that they had fallen short in this particular

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case, they accept the consequences and, as I have said earlier, they are moving forward with solutions. So, that is where the team is at, working together to find solutions, both for the short term – for the Suzuki Cup – and for the medium to long term.

On the earlier question of the involvement of the Government in the construction, yes, there was consultation. It could perhaps have been done much better. If you look back and look at whether or not more attention could have been paid in terms of the solution that was arrived at for the pitch, perhaps, in hindsight, we could have put in a lot more attention in terms of looking at the results.

What I can say is that during the construction phase, the consortium had indeed done experiments and tests and derived the best solution for the pitch. At that time, the tests were done under a shade in the Orchid Country Club and so they were trying to replicate the conditions of the Stadium in order to find the best grass and best solution for the pitch. But the Stadium was not there, so they could only attempt to replicate something which they thought would be ideal for the conditions of the National Stadium. The results were done and the tests were shown. In fact, the people who were doing the tests were from an agency that was specifically recommended by FIFA. So, it was not just done by themselves. They had done it through an outsourced agency recommended by FIFA and they had done it extensively to show that this was the best solution available at that time. With the benefit of what we have now, we are re-examining the test results, the assumptions and we are asking them to do many more tests so that we can be very sure of a robust solution going forward.

Madam, Singapore prides itself for its efficiency for being well organised, for being forward looking. But some of the comments arising from the problems affecting the National Stadium pitch have led to international sports groups questioning the ability of our National Stadium to produce world-class conditions. Can I ask the Minister what is his assessment of this on Singapore's reputation as well as its ability to attract world-class sports tournaments to Singapore?

Madam, I acknowledge that there had been negative publicity in the first few events or the first two, in particular – the Juventus game and the Brazil-Japan game – because of the conditions of the pitch. I would say that we will be able to overcome this negative publicity if we get the solution right.

So, if you look at the coming Suzuki Cup and the way the pitch conditions are significantly improved compared to before, and if you look at what we are planning going forward in the calendar, so long as we get a good solution, we will work out the best possible solution going forward. Then, we will be able to overcome the initial phase of negative

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publicity.

I would say also that we will still continue to receive a lot of interests from sporting event organisers to do events in the National Stadium, and, in fact, more than we probably can cope, given the event schedule that we have for the National Stadium. Notwithstanding the impact of the first two matches where the pitch conditions were not ideal, there is still very strong interest by sport promoters everywhere in all the different sports, whether it is football or rugby, to have events anchored in our new Sports Hub.