Bad Sports Hub deal

Reference:
Straits Times
$2.3b cost of ending Sports Hub public-private tie-up represented ‘fair deal’ for Govt: Edwin Tong
1 Aug 2022
https://www.straitstimes.com/singapore/politics/costs-of-terminating-sports-hub-ppp-represented-fair-deal-for-government-says-edwin-tong

Mr Tong claimed that the termination fee of about $1.5 billion for the Sportshub public private partnership is comparable to the $1.2 billion that the Government would have had to bear to build it plus $0.3 billion open market value for the Sports Hub

If the government had spent $1.2 billion in the first place to build the Sports Hub, it would have owned the Sports Hub already, why would it have to pay an extra $0.3 billion for the Sportshub’s open market value?

It seems therefore that the $1.5 billion termination fee is marked up by $0.3 billion over the $1.2 billion cost of the Sportshub.

Mr Tong said that after taking back the Sportshub, the annual running cost amounts to $68 million. But he also said that under the original public private partnership, SportSG would have had to pay SHPL $193.7 million yearly from 2014 to 2035.

Why did the government negotiate a $193.7 million a year deal with SHPL when it could have operated the premises by itself for just $68 million a year which is a whopping 65% discount?

NB:

In the original agrement: sum of 12 future annual payments of $193.7 million from 2023 to 2035 = 12 * $193.7 million = $2.32 billion

After termination of agreement: sum of 12 future payments of $68 million from 2023 to 2035 = 12 * $68 million = $816 million which is fairly close to the $800 million figure quoted by Mr Tong

Mr Tong rounded down the figure after termination but did not round down the figure in the original agreement

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