Demolishing and rebuilding Allianz Stadium would generate more economic benefit, plans reveal
DEMOLISHING and rebuilding Allianz Stadium from scratch delivers significantly more bang for its buck than a refurbishment and will means a lot more top tier events for Sydney, says a confidential ‘Business Case’ on the project obtained by The Daily Telegraph.
NSW
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THE top-secret business case behind the redevelopment of Allianz Stadium reveals demolishing and rebuilding the arena delivers significantly more economic benefit than any other option.
The Daily Telegraph has obtained the executive summary of the KPMG business case dated January 2018, currently being prepared for the Berejiklian government.
The KMPG documents, labelled “sensitive — NSW cabinet” boost the state government’s case to demolish and rebuild the Moore Park stadium, finding that the alternative of a simple refurbishment would have “significant capital costs for marginal improvements” and deliver “significantly negative net economic outcomes”.
The analysis reveals a new stadium at Moore Park would deliver an extra 20 events on average per year, from 34-37 events to up to 59. This would include more than twice as many NRL games, the addition of international rugby league more regular US events and double the number of concerts.
It also predicts a new stadium would drive an attendance increase of about 15 per cent.
Based on these assumptions, the analysis finds in favour of knocking down the ailing stadium and rebuilding it to a 45,000-seat venue, finding this option delivers the best financial benefit and strongest cost benefit ratio.
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The final business case has not yet been seen by Sports Minister Stuart Ayres. KPMG will deliver a final version to Infrastructure NSW, which will then hand it to the government within the next month.
The documents put the cost benefit ratio at “approximately break-even”, for demolishing and rebuilding the stadium, meaning for every dollar spent there will be a dollar in economic benefit for the state.
This analysis will provide a boost to the Berejiklian government, which has been under pressure of the scale of the spend planned for stadiums. The government has previously put the cost of its Allianz stadium redevelopment at $705 million.
The KPMG documents find that the current ageing Sydney Football Stadium “presents a strong case for change” with doubts it could remain open beyond the end of the year unless its occupancy certificate is extended.
“The stadium requires significant capital outlay to remain operational, only to deliver a substandard product that is affecting demand for sporting events,” the document states.
“There are also real and immediate safety concerns, equity concerns and significant operational inefficiencies.”
Assessing the decrepit state of the current stadium, the KPMG analysis notes that it would cost $141 million for a “first instalment” of “remedial works” just to keep the stadium open — which would only extend its life “by up to five years, say to 2021”.
It points to the safety problems and operating inefficiencies, including fire safety issues, security problems and noncompliance with the building code of Australia.