SINGAPORE — The Singapore Sports Council (SSC) has scrapped the Changi Motorsports Hub project, after deciding that the concessions potential investors wanted to make it commercially successful did not justify the costs and benefits of reviving the stalled racetrack project.

SSC Chief Executive Lim Teck Yin added at a press conference yesterday that a permanent racetrack will no longer be considered here, crashing hopes that a facility could spin off much more for the tourism industry and other businesses.

The major stumbling blocks in the project included requests for free land to build it, doubling the lease of the 41-ha site at Aviation Park Road to 60 years, tax concessions and that SSC fund part or the entire project.

The requests were made, even though interested parties were told of the SSC’s three key requirements to move the project forward: It must be fully funded by the private sector, be commercially viable, and that there is no special tax-exempt status for the land.

But the potential investors, who were approached during a seven-month “market sounding and request for information (RFI) exercise”, said the project will not be financially viable unless a significant combination of the key concessions were in place. The SSC received seven proposals from six consortia, including one based overseas, in the exercise.

The RFI followed the SSC terminating its contract with SG Changi in December 2010 after the Japanese-led consortium failed to meet key construction milestones.

It had won a bid to build the Changi Motorsports Hub in March 2009, with plans for a 250-room hotel, retail and a racing academy on site. The group had also lined up MotoGP, the motorcycle equivalent of Formula One, as the star draw at the venue. SG Changi paid a total of S$40 million for the land but quickly ran into financial difficulties.

The decision to axe the project permanently came after more than four months of “whole-of-government deliberations” after the RFI ended in January this year.

“After careful consideration and consultation with other government agencies, we have decided not to proceed with the tender as these significant conditions for the project to be commercially viable are things that SSC cannot accede to,” said Mr Lim.

“The majority of the feedback we receive from the industry indicates that the project is not sustainable if undertaken solely by the private sector without SSC’s involvement.

“The amount of concessions, for example, through direct equity stakes, land pricing or tax concessions is not insignificant and not surprising due to the high barriers of entry into the project.”

He added that in balancing the costs and benefits, the land take and proposed use of it do not justify an operating model that involves significant government subsidy or concession.

The SSC chief said the plot of land, next to where the bi-biennial Singapore Air Show is held, will now be handed back to the Singapore Land Authority after piles driven in the early stages of construction by the previous consortium are removed.

The cost of clearing them, which will take almost a year, and those of conducting the RFI will be billed to SG Changi, before any refunds are considered in light of terminating their contract.

A permanent track would have given Singapore an opportunity to build an eco-system of high-technology industries, which the country excels in, around it.

It was one of the objectives of building the race track and such companies here and those planning to do so, will now have to look to a similar but bigger track just across the Causeway.

The RM3.5 billion Motorsports City complex in Johor’s Iskandar economic region is being built and will be managed by billionaire Peter Lim’s Singapore-based FASTrack when ready in 2016.

Chief executive of the facility Barry Kan told TODAY it is designed to attract research and technology companies, especially those based in the Republic, to test their products there.

“Our catchment area is principally Singapore and apart from motorsports enthusiasts, it is our plan to grow high-technology companies around Motorsports City,” said the Singaporean.

As to the growing interest in racing here, SSC’s Lim said the sporting authority will now help Singapore Motor Sports Association promote it through Johor’s Motorsports City. “SSC stands ready to work with SMSA, if need be, to liaise closely with our counterparts in Malaysia, in Johor in particular, if there is any kind of facilitation that can be afforded in the future,” he said.