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Stadium budget blowout

The Allianz Stadium rebuild will cost the NSW Govt $99 million more than expected. Photo: Alec Smart

By ASHNA BHARKHADA

The Sydney Football Stadium rebuild will cost the NSW Govt $99 million more than expected, as details of the new contract signed with builder John Holland emerged on 18 Dec.
The new contract for stage two of the project is worth $735 million, escalating the total estimated cost for the new arena, commercially known as the Allianz Stadium, to $828 million when factoring in other project costs, including demolition and contingency.

On 12 Dec, NSW Treasurer Dominic Perrottet refused to confirm whether the Allianz Stadium in Moore Park would be completed within budget, but said he was “confident” it will finish on time. NSW government missed the November deadline for appointing a new contractor to rebuild the planned 45,000-seat venue, as talks continue with two companies bidding for the project.
“What I can guarantee with Allianz is that we’re going to have a world-class stadium,” Perrottet said.

The government budgeted $729M for the controversial redevelopment, of which over $36M was used to tear down the former building. Contractor Lendlease was controversially taken off the project earlier this year after their offer to rebuild the stadium did not meet “the government’s expectations.” It is understood that the quote provided by Lendlease was higher than what the government wanted to pay. The remaining $693M is “not enough” to rebuild the stadium, Seven News reported at the time.
And yet, despite the NSW Govt’s rejection of Lendlease’s costings, it’s now obvious they will pay more for the stadium rebuild anyway.

On July 29 Sports Minister John Sidoti declared that LendLease would not be able to sue the NSW Govt to recover losses after they were dumped from the stadium rebuild because they “failed objectives”. Although he didn’t specify those objectives, it is understood it centred om the projected costs blowout. After the contractor was dropped, Sidoti then insisted the stadium rebuild “will be delivered on time and on budget.”
With the latest announcement that the stadium rebuild will go $99 million over budget anyway under contractor John Holland, it is not known whether LendLease now have legal redress to launch a claim against the NSW Govt.

Infrastructure Challenges
It seems that Allianz stadium is following suit with WestConnex and Sydney Light Rail – untimely and overbudget. “While the estimated total cost for this build is higher than what we originally anticipated,” NSW Premier Gladys Berejiklian said after the blowout was revealed, “it is much better value than what we would have achieved had we not gone back to the market. It is important to deliver the world-class stadium we promised to attract the best events to our state.”

The successful contractors, John Holland Group, owned by the majority Chinese Govt-owned China Communications Construction Company Ltd, has multiple construction operations across Australasia and South-East Asia. Despite being a predominantly state-run multinational, it is closely associated with the NSW and Federal coalition governments’ privatisation projects, including building the Sydney and Melbourne Metro rail lines and Ravenhall Prison in Victoria.

The NSW Labor Party, which campaigned on a platform of “schools and hospitals before stadiums” at the March 2019 state elections, described the stadium rebuild process as a “shambles’.
Labor’s sports spokeswoman, Lynda Volz, said Premier Gladys Berejiklian should have been open to the idea of building a smaller stadium, given Allianz Stadium so rarely sold out its 45,000-seat capacity. She suggested having a 30,000-seat stadium instead, to meet the budget.

After the NSW Treasurer released the NSW Budget Half-Yearly Review last week, he reiterated that “issues and challenges come up along the way” when building infrastructure at a large scale. NSW is investing “record amounts” in stadium infrastructure, which includes an $810 million investment in the ANZ stadium in Homebush.
“We are very confident that our stadiums will be delivered on time and that people of this state will have the best sporting infrastructure, not just in the country but in the world,” Perrottet insisted.

Allianz Stadium is still expected to be completed by early 2022. But the construction costs have overrun, watch this space to see if the construction deadline does too..

 

Further reading:  https://cityhubsydney.com.au/?s=allianz

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