NSW Government’s footy stadium farce mushrooms

We argued previously that the NSW State Government had hit ‘peak stupid’ in deciding to spend $2.5 billion to demolish and rebuild the Olympic Stadium and the Sydney Football Stadium, both of which are underutilised.

These stadiums were assessed to deliver zero net economic benefits for the state, according to analysis by hired gun KPMG. Moreover, these stadiums are to be paid for by selling-off the lease to the state’s monopoly land titles registry – a move that will very likely see end-users being gouged by the new monopoly owners, with the NSW State Government also losing a reliable income stream.

In March, Premier Gladys Berejiklian compromised somewhat on the projects, announcing that “Allianz Stadium will be knocked down and rebuilt but ANZ Stadium will undergo a “major renovation” – as opposed to the full $1.25 billion for a knockdown and rebuild” – a move that would save some $500 million and reduce the total cost of the projects down to $2 billion.

Over the weekend it was reported that the Sydney Football Stadium rebuild is in chaos with construction contractor Lendlease leaving project:

Sports Minister John Sidoti said Lendlease had not been able to meet the government’s requirements to rebuild the stadium on the Moore Park site on budget by 2022.

“The project budget for Sydney Football Stadium is $729 million which includes stage one [demolition] and stage two [reconstruction] works,” Mr Sidoti said.

“Lendlease’s stage two offer did not meet the government’s expectations so we are looking for another builder in a competitive market”…

Labor’s spokeswoman for sport, Lynda Voltz, said… “There is a demolished wreck in the middle of Sydney today and Gladys Berejiklian has no plan to fix it.”

With widespread infrastructure bottlenecks across Sydney, and concerns over a ‘Big Australia’ and over-development at fever pitch, hosing $2 billion on dud projects like this still makes as much sense as punching yourself in the face.

Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith is an economist and has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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