Why new stadium will cost $1.4b

Gareth Parker
Inside State
June 11, 2015, 4:39 am


Colin Barnett told Nova FM on Tuesday that Budget estimates, which have occupied the Legislative Assembly this week, is his “most boring day of the year”.

While it might be a bit tedious for the Premier, for people who have an interest in how WA taxpayers’ money is spent (likeInside State for example) it’s a fascinating week indeed.

The opportunity to forensically examine Government decisions through the Budget process is one that allows the Opposition, on behalf of voters, to get to the bottom of all sorts of issues that governments have previously been reluctant to reveal.

Like the true cost of one of the Barnett Government’s most high-profile projects, the 60,000-seat stadium beginning to take shape at Burswood.

The Government has put a range of price tags on the project over the years as it has evolved, and there are different prices for different components of the project, not all of which have been reported together.

Of course, given the Budget position, the price tag of a “nice-to-have” like a stadium is all the more politically sensitive.

Complicating factors is the structure of the project itself, which has complicated financing arrangements embedded in a 28-year design, build, finance and maintain contract entered into with a private-sector consortium led by Multiplex.

In theory, the Government is providing 60 per cent of the capital cost and the consortium is providing 40 per cent of the capital cost, with the Government to pay back the private sector with 25 years’ worth of monthly service payments which also cover the interest and maintenance costs.

This helps the Government get a large portion of the capital cost off its books up front, but efforts to learn the true liability for taxpayers have to date been obscured by the Government’s insistence that all financial details of the contract are commercial in confidence and will not be disclosed.

Labor’s Bill Johnston tried to crack the nut on Tuesday, asking Barnett: “What is the total cost, including the obligations to the contractors?”

Barnett replied: “I refer you to media announcements that detail the cost and timing of the stadium. That information has been in the public arena for months.”

Well, no, it hasn’t.

The most recent mention of the stadium’s cost in a Government media statement was 21 stadium press releases ago, in July 2014, which stated the project budget was $902.4 million.

In fact it is much more than that, as became apparent as Labor had another go yesterday at teasing out the detail from Treasurer Mike Nahan and his strategic projects guru Richard Mann.

While there was significant and confusing discussion about accounting treatments, which seemed to momentarily befuddle even the Treasury officials, what emerged was a picture that looks something like this.

The cost of the Government’s 60 per cent capital contribution is $489 million.

The liability to Government for the 40 per cent capital cost to be met by the consortium is $423 million.

The cost of the public transport package to make the stadium work is $358 million (of which $22 million is being met by the consortium contract), so call it $336 million.

And the cost of the stadium plaza, precinct and management costs which are not covered by the consortium contract are $131 million.

Add all that together and the true capital cost of the stadium emerges: $1.379 billion.

That figure does not include the value of the maintenance payments which will be rolled into the monthly service payment to the consortium once the stadium is up and running. Those are, surprise surprise, commercial in confidence.

But another key revelation from Mann yesterday was that the Government assumes that the stadium will be able to generate sufficient revenue to meet those costs.

If that assumption holds, it means taxpayers will be inoculated, but the size of the pie for stadium users (primarily West Coast and Fremantle footy clubs) will be smaller. But that’s another set of negotiations altogether.

https://au.news.yahoo.com/thewest/a/...ill-cost-1-4b/

Now this is a real surprise isn't it!

Based on the last major stadia built here, The Perth Arena, initially $236 million, final "official" figure around +$800 million, but the real cost will never be known, I'm sure there is still room for a further blow out. My guess on final costs will be closer to +$2 billion.

$35 million for a fancy bridge across the Swan River for pedestrian traffic to get from East Perth to the new stadium that according to someone in the media will be Perth's version of the Sydney Harbour Bridge. :rolleyes:

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Originally Posted by jargan83

$35 million for a fancy bridge across the Swan River for pedestrian traffic to get from East Perth to the new stadium that according to someone in the media will be Perth's version of the Sydney Harbour Bridge. :rolleyes:

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The Sydney Harbour Bridge only cost $6.25 million. If it's our version, do it for that price!

All-events ticket deal for stadium

Gareth Parker
June 10, 2015, 4:30 am


Premier Colin Barnett has told State Parliament that venue memberships will “most likely” be available for the new 60,000-seat stadium at Burswood.

And he said 10,000 seats would be set aside for AFL games for general admission.

Venue membership will sold for the Perth Stadium. Illustration: WA Government

Under questioning in a parliamentary estimates hearing by Labor’s Rita Saffioti, Mr Barnett said there would be a limited number of stadium memberships sold, though he refused to go into detail about how many would be available or how they would be offered.

Stadium memberships, which are available at some other Australian venues such as Etihad Stadium in Melbourne, allow patrons to buy a seat to every event at a venue.

WA’s AFL clubs West Coast and Fremantle are wary of the idea of stadium memberships, which would compete with their own premium membership or corporate offerings, depending on the structure of the proposed deal.

The clubs are also wary that demand for their membership offerings could be undermined if there are too many general admission tickets available.

“Most likely there will be a number of those (stadium memberships) on an annual basis,” Mr Barnett told Parliament.

“But the public can be assured that the general allocation of seats will be 10,000.” Mr Barnett said there would be a “limited number” of stadium memberships. When Ms Saffioti put it to him that there could be 3000-5000 stadium memberships, Mr Barnett said those numbers were “fanciful”.

The Government is in sensitive negotiations on the stadium, including user agreements with West Coast and Fremantle, which will have a big impact on the clubs’ revenue models when they move in for the 2018 season, as well as with four consortiums bidding for the operator rights to the stadium.

The consortiums are: Perth Stadium Management, a division of the WA Football Commission and backed by Live Nation and Delaware North; Perth Arena operator AEG Ogden; Stadium Australia Operations, the operator of Sydney’s Olympic Stadium; and Spotless’ Nationwide Venue Management, operator of the Perth Convention and Exhibition Centre.

https://au.news.yahoo.com/thewest/a/...l-for-stadium/

It was a combination of seats like the above and sponsors signage that was the reason NZ had to give us RWC 2003 exclusively.

So before we have the stadium they are screwing up potential events.

By the time they have stadium seats and public reservations, there will be no more seats available to the AFL teams than Subiaco. So it will be very interesting to see how they manage to get the "better financial outcome" for the WAFC that they insisted was necessary for them to sign up. I wonder if the AFL teams would actually have the stones not to sign?

It does have shambles written all over it though...another piece of infrastructure that will cost a fortune, two by the time the real cost is counted and ends up barely adding anything compared to what already exists.

WA govt denies stadium cost blow out

AAP
June 11, 2015, 11:14 am

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Claims of a massive cost blow out for Perth's new stadium have been denied by the West Australian government.

The state opposition grilled the government for a breakdown of the costs during budget estimates on Wednesday night, concluding the total cost was approaching $1.6 billion, compared to an original capital budget of some $900 million.

But the Treasurer's office denied there had been cost blow out, saying the original figure did not include transport infrastructure, planning or project management costs.

https://au.news.yahoo.com/thewest/wa...cost-blow-out/



Ahh well that explains it, I don't know why we would have expected to get the complete project cost right from the start :S

They were probably being cute at the start by using the word 'capital'. Not sure whether infrastructure, planning and project mgt costs would be classed as 'capital' expenditure in a public finance context.

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Originally Posted by Sheikh

The Sydney Harbour Bridge only cost $6.25 million. If it's our version, do it for that price!

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what is it in todays dollars? then perhaps re-think that statement.

Quote:

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Originally Posted by Sheikh

The Sydney Harbour Bridge only cost $6.25 million. If it's our version, do it for that price!

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I just looked it up for my own curiosity. Firstly it was 6.25 million POUND. And according to the RBA inflation claculator, from 1930 to 2014, it equates to something like $485 Million.

Lets keep it to $35M :D

http://www.rba.gov.au/calculator/annualPreDecimal.html

With or without Hoges doing the scaffold?

If it's going to cost so much, it would be nice to see an ETFE roof on the top, maybe one that can open and shut.