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SG Changi settles motorsports hub debts

SINGAPORE — Three years after its contract to build Singapore’s first permanent track was cancelled by the Government, SG Changi has finally drawn a line under an ignominious chapter that began with hope and ended in financial disaster.

Construction at the Changi Motorsports Hub stopped after only a month in January 2010 due to financial issues and the plug on the project was eventually pulled in December 2011.  
TODAY FILE PHOTO

Construction at the Changi Motorsports Hub stopped after only a month in January 2010 due to financial issues and the plug on the project was eventually pulled in December 2011.
TODAY FILE PHOTO

SINGAPORE — Three years after its contract to build Singapore’s first permanent track was cancelled by the Government, SG Changi has finally drawn a line under an ignominious chapter that began with hope and ended in financial disaster.

Its slate was wiped clean on Oct 21, when it finally paid S$6.9 million owed to piling contractors CS Construction & Geotechnic (CSCG), which is a wholly owned subsidiary of CSC Holdings. Work done to reinstate the 41ha of land near Changi Airport that had 1,000 piles driven into it has also been completed and was returned to the Singapore Land Authority (SLA) three weeks ago.

What was left of the S$40 million SG Changi paid for the land on a 30-year lease and returned to the Japanese consortium remains confidential under the terms of their contractual agreement with the country’s sports authorities.

In response to queries from TODAY, Sport Singapore assistant director (communications and engagement division) S Parameswaran said no public money was spent during the entire process.

“Sport Singapore has returned the land to Singapore Land Authority on Oct 9, and has refunded some of SG Changi’s paid-up capital on Oct 21 after deducting the costs of the reinstatement of the land, which includes the holding period of the land and administrative costs related to the Changi Motorsports Hub project,” he said.

“No public subsidies were required for the reinstatement of the land as the Hub was a commercial project originally arranged to be fully funded by SG Changi.”

SG Changi won a bid in March 2009 to build Singapore’s first permanent track at an estimated cost of S$380 million. But construction stopped after only a month in January 2010 when it failed to pay the full amount of S$10 million of an advance payment due to CSCG.

Sport Singapore, trading as Singapore Sports Council then, finally pulled the plug on the project in December 2011 after SG Changi failed to raise funds to continue with construction and subsequently missed key milestones. After waiting for more than four years for accounts to be settled, See Yen Tam, group chief executive officer of CSC Holdings, is relieved the entire episode is over and said they did not levy any interest on the outstanding sum.

“We at least got the principal sum back,” said See. “It was a long wait, but it looks like Christmas came early for us this year. To be fair, I think SG Changi did their best, but they were caught during a time when the economy was not good and had difficulty raising funds.”

He said SG Changi chairman Fuminori Murahashi and director Moto Sakuma kept CSC updated on the progress of their termination agreement with Sport Singapore, which came to a close after they received what was left of the S$40 million they paid for the land.

Said Moto: “We got some money back. I’ve been travelling back and forth between Japan and Singapore to help settle this problem and it is a burden off our shoulders now. We are into other business but have washed our hands of motorsports.”

SG Changi also had to bear the cost of conducting a Request for Information exercise during a seven-month period in the second half of 2012 to gauge whether the project should be re-tendered. It was also billed for work, costing “several hundred thousands of dollars”, to shave off about 2m from each of the 1,000 piles below the surface before the land was given back to the SLA.

Experts told TODAY it would have been a massive job, costing up to S$10 million, to remove all 1,000 piles completely, but there was also the risk many would break in the process, leaving large parts embedded in the soil.

Chua Tong Seng, vice-president of the Association of Consulting Engineers, said that depending on the nature of a project, the land can be redeveloped for other uses. “It is rare to leave the piles in, but they can still be re-used if new projects share the same structure,” he said. “If the footprint is different, engineers will have to work around them.”

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