NSW Premier in a hole over Allianz Stadium rebuild plans

NSW Premier left with a hole in the ground and no builder for her contentious $729m stadium.

Demolition work nears completion on the site of Sydney’s Allianz Stadium at Moore Park in the city’s east yesterday. Picture: Adam Yip

NSW Premier Gladys Berejiklian has been left with a hole in the ground and no builder for her contentious $729 million Allianz Stadium knockdown and rebuild after the government cancelled its contract with builders Lendlease over a cost blowout.

Lendlease told the government it was unable to build the stadium within the budget Ms Bere­jiklian promised at the March election. The debacle sets the scene for construction delays and the possibility the stadium will not be ready for the 2022 NRL grand final — the year before the next state election. If the venue is not ready, the NRL could take the match to Queensland.

Sports Minister John Sidoti’s office said the government had decided not to proceed with Lendlease, which demolished the old stadium, after it was unable to reach agreement with the firm.

The Australian revealed yesterday that Lendlease was chasing tens of millions of dollars more to finish the project, threatening to blow out the government’s $2 billion stadiums package even further.

Already, the government has spent $360m on Bankwest ­Stadium at Parramatta and is promising $810m for a refurbishment of ANZ Stadium. It also spent $200m buying back ANZ from a private operator.

The Weekend Australian has been told Lendlease wanted $50m to $100m more than had been budgeted to complete the Allianz (Sydney Football Stadium) project in Sydney’s east.

Last week, Lendlease told the government it was simply unable to lower the cost.

“We asked Lendlease to sharpen their pencil. That didn’t happen,” a government source said.

The issue dominated the NSW election campaign, with Labor running a campaign slogan of “Schools and Hospitals before Stadiums”.

Former Labor leader Michael Daley threatened on air to sack broadcaster Alan Jones from the Sydney Cricket Ground Trust — a supporter of the new stadium — if he became premier.

The stadium is the second major project under Ms Berejiklian’s watch to show a cost blowout, with the CBD light rail project — which runs past the new stadium — now set to cost more than $3bn despite being first budgeted at $1.6bn.

Ms Berejiklian’s determination to ensure the project comes within the cost promised at the election appears to have led to the decision to stop Lendlease building the stadium.

The search for a new builder will either go to open tender or the government will enter discussions with bidders who put their hands up in the early bidding process.

Former sports minister Stuart Ayres announced in a press release last December that “a world-class Sydney Football Stadium is today one step closer with Lendlease announced as the construction contractor.

“The stadium is expected to be complete in early 2022.”

The government has now been forced to reveal that only a demolition contract was signed at the time and the construction contract has not been signed.

Mr Sidoti said last night: “The project budget for Sydney Football Stadium is $729m, which includes stage one and stage two works. Lendlease’s stage two offer did not meet the government’s expectations so we are looking for another builder in a competitive market.

“The NSW government is committed to delivering the Sydney Football Stadium on time and within the project budget for the people of NSW.”

The Weekend Australian has been told that the SCG Trust and Infrastructure NSW have also been in discussions with the builder about a curtain to be placed within the arena to reduce its capacity from 45,000 to 30,000 people for certain games and the cost of this has also been a point of contention.

Mr Sidoti told the ABC yesterday he believed the government was “showing leadership” with its decision.

The opposition’s sports spokeswoman, Lynda Voltz, said last night: “Gladys Berejiklian looked the people of NSW in the eye at the election and said she had this under control.

“Well the election’s over and the wheels have fallen off the bus.

“There is a demolished wreck in the middle of Sydney today, and Gladys Berejiklian has no plan to fix it.”

In 2017, Ms Berejiklian promised to spend $2.5bn on her stadiums network, including a $1.2bn knockdown and rebuild of ANZ Stadium.

In April last year, she retreated and scaled back the ANZ redevelopment to its lower levels and making the oval rectangular, at a cost of $810m, after controversy over the two stadiums being built at once.

The government has already had to compensate clubs for time away from Allianz Stadium as well as pledge the $729m for the knockdown and rebuild.

In recent weeks, a dispute has broken out between the NRL and the state government over a request by rugby league authorities for more money to ensure the grand final stayed in Sydney while construction on both stadiums occurred.

The NRL claims the memorandum of understanding it struck with the NSW government has been breached because ANZ is set to be delivered a year late. The NRL has threatened to take the grand final to Brisbane unless it receives more compensation.