❓ A WA parliamentary question seeks financial details regarding the WESTADIUM consortium's involvement in the new stadium project, including rates of return, costs, revenue streams, and risk management. The government's response cites commercial confidentiality for many financial details but provides some information on revenue control and public access to contract clauses.
AnsweredQoN 2885Legislative Assembly
QuestionView source ↗
I refer to the selection of the WESTADIUM consortium to deliver the new stadium at Burswood, and ask: (a) what internal rate of return does WESTADIUM anticipate it will receive from this project; (b) what is the discount rate used to calculate the net present cost of the project to the State; (c) what is the discount rate used to calculate the net present value of the project to WESTADIUM; (d) will the Minster disclose WESTADIUM’s total cost of capital; (e) how does this cost of capital compare with the cost of capital if borne by the State Government; (f) in addition to the regular service payments to be made by the State Government, what other revenue streams directly related to the Stadium’s operations will WESTADIUM have control over once the Stadium is in operation; (g) are there any revenue-generating opportunities managed by WESTADIUM indirectly related to the Stadium’s operations including the retail precinct to be built directly adjacent to the stadium; (h) if yes to (g), what are they and what are the expected revenues that will be realised from each of these opportunities; (i) will WESTADIUM carry the risks associated with a variation in actual ticket revenues from forecasted revenue; (j) where can members of the public at least access clauses in the contract between WESTADIUM and the State Government relating to the termination of the agreement between WESTADIUM and the State Government; (k) what are the annual payments that the State Government will be making to WESTADIUM over the 25 years from the completion of the new stadium; (l) are there any clauses in the agreement between WESTADIUM and the State Government that allow for variation to the payment schedule and what are they; (m) are there any clauses in the agreement between WESTADIUM and the State Government relating to revenue risks associated with ticket and other stadium related revenue streams; (n) are there any conditions imposed on WESTADIUM in relation to rents, fees and charges that would be applied to football clubs accessing the new Stadium; (o) are there any conditions imposed on WESTADIUM in relation to ticketing, merchandise and confectionary sold at the Stadium; (p) how much ticket revenue does the consortium expect to collect each year for the duration of the agreement; (q) where can members of the public access the underlying calculations and assumptions behind the risk-adjusted public sector comparator, used to quantify the cost benefits of the partnership between the State Government and WESTADIUM; and (r) are there any conditions imposed on WESTADIUM in relation to ticketing, merchandise and confectionary sold at the Stadium?
AnswerView source ↗
Answered
14 October 2014
Responded by
Minister for Sport and Recreation
Response time
34 days
(a) The internal rate of return is classified as commercial in confidence information in the contract between the State and WESTADIUM.
(b) The discount rate is critical to the bid evaluation is strictly confidential. Details on the discount rate methodology used by the State are available in the relevant policy guide at
www.treasury.wa.gov.au/cms/content.aspx?id=3030
.
(c) The discount rate used to calculate the net present value of the project to WESTADIUM was a matter for WESTADIUM
(d) No. WESTADIUM's total cost of capital is classified as commercial in confidence.
(e) The cost of capital for WESTADIUM is higher than it would be if borne by the State Government. The capital cost cannot be considered in isolation and when the whole 25 year contract term is considered, including capital and service costs, this will ultimately cost the State less.
(f) WESTADIUM will not have control of other revenue streams directly related to the Stadium's operations.
(g) Yes, there is one revenue-generating opportunity which will be managed by WESTADIUM and indirectly related to the Stadium's operations. A space of approximately 500m2 has been allocated within the Stadium as a commercial opportunity.
No retail precinct is currently proposed to be built directly adjacent to the stadium. It is likely that existing infrastructure adjacent to the Stadium will be redeveloped as a hospitality venue. This redevelopment will not be undertaken by WESTADIUM and will be separately managed by the State.
(h) The commercial opportunities, and the expected revenues that will be realised from each, have not been fully determined at this time. Any revenue from the commercial opportunity available to WESTADIUM is commercial in confidence.
(i) No. WESTADIUM will not receive ticket revenues.
(j) Members of the public will be able to access clauses in the contract, including termination clauses, on the Department of Treasury website. Non-confidential information related to the contract will be published on the website within six months from contract award, in accordance with the National PPP Guidelines.
(k) The annual payments to be made to WESTADIUM over the 25 years are commercial in confidence.
(l) Yes, there are clauses in the agreement that allow for variation to the payment schedule.
Non-confidential details of those clauses will be available on the Department of Treasury website as per response 'j' above.
(m) No. WESTADIUM will not receive ticket or any other Stadium related revenue streams.
(n) No.
(o) Yes. WESTADIUM is not permitted to sell tickets, merchandise or confectionary at the Stadium.
(p) Refer to response 'm' above.
(q) Members of the public will be able to view a summarised version of the public sector comparator on the Department of Treasury website in accordance with the Department of Treasury Public Private Partnership Project Disclosure Policy (August 2011), in the time period outlined in response j.
(r) Yes. Refer to response 'o' above.
(b) The discount rate is critical to the bid evaluation is strictly confidential. Details on the discount rate methodology used by the State are available in the relevant policy guide at
www.treasury.wa.gov.au/cms/content.aspx?id=3030
.
(c) The discount rate used to calculate the net present value of the project to WESTADIUM was a matter for WESTADIUM
(d) No. WESTADIUM's total cost of capital is classified as commercial in confidence.
(e) The cost of capital for WESTADIUM is higher than it would be if borne by the State Government. The capital cost cannot be considered in isolation and when the whole 25 year contract term is considered, including capital and service costs, this will ultimately cost the State less.
(f) WESTADIUM will not have control of other revenue streams directly related to the Stadium's operations.
(g) Yes, there is one revenue-generating opportunity which will be managed by WESTADIUM and indirectly related to the Stadium's operations. A space of approximately 500m2 has been allocated within the Stadium as a commercial opportunity.
No retail precinct is currently proposed to be built directly adjacent to the stadium. It is likely that existing infrastructure adjacent to the Stadium will be redeveloped as a hospitality venue. This redevelopment will not be undertaken by WESTADIUM and will be separately managed by the State.
(h) The commercial opportunities, and the expected revenues that will be realised from each, have not been fully determined at this time. Any revenue from the commercial opportunity available to WESTADIUM is commercial in confidence.
(i) No. WESTADIUM will not receive ticket revenues.
(j) Members of the public will be able to access clauses in the contract, including termination clauses, on the Department of Treasury website. Non-confidential information related to the contract will be published on the website within six months from contract award, in accordance with the National PPP Guidelines.
(k) The annual payments to be made to WESTADIUM over the 25 years are commercial in confidence.
(l) Yes, there are clauses in the agreement that allow for variation to the payment schedule.
Non-confidential details of those clauses will be available on the Department of Treasury website as per response 'j' above.
(m) No. WESTADIUM will not receive ticket or any other Stadium related revenue streams.
(n) No.
(o) Yes. WESTADIUM is not permitted to sell tickets, merchandise or confectionary at the Stadium.
(p) Refer to response 'm' above.
(q) Members of the public will be able to view a summarised version of the public sector comparator on the Department of Treasury website in accordance with the Department of Treasury Public Private Partnership Project Disclosure Policy (August 2011), in the time period outlined in response j.
(r) Yes. Refer to response 'o' above.
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