Piling contractor to sue Changi Motorsports Hub

Written by Cheryl Tay on . Posted in Cheryl Tay Blog | Blog Post of Cheryl Tay

I think it is embarrassing that Singapore, which hosts a successful Formula 1 night race, cannot even get a permanent track going. Well, I hope it finally comes up some way or another, with government intervention hopefully, but at least for now it doesn’t seem like we’ll be getting our track anytime soon. 

changi-motorsports-hub-site

In today’s copy of The Straits Times, yet another crippling news about our Changi Motorsports Hub (CMH) project was reported – the piling contractor, CSC Holdings, for the CMH has abandoned the project and will now be suing SG Changi Pte Ltd. SG Changi was the consortium who won the bid against two others to design, finance, build, manage and run CMH for 30 years.

 

It was a happy time when the annoucement for a go-ahead for our own permanent circuit was given by the government and land was set aside for this project. A Request For Proposal was set up by the Singapore Sports Council (SSC) and eventually only three bidders were in contention for the tender of CMH.

cmh_press_conSG Changi won the bid last March and there was a ground-breaking ceremony in July, where construction was to start in August but problems kept surfacing one by one: 

changisgggg1. Late 2010: Management reshuffle

First, there was some internal changes in management – Former Japan GT driver Genji Hashimoto, previously SG Changi’s managing director, left the group while Japanese businessman Moto Sakuma came onboard as director. Singaporean Eddie Loh also resigned last year. 

 

Other members who constitute the group include executive chairman Fuminori Murahashi as well as director Thia Yoke Kian, the former owner of Jurong Kart World, but the relationship between these two parties has soured.

 

Teh Leong, president of the Singapore Cricket Club, is also involved with SG Changi in some way but I’m not sure of the extent of his influence.

 

2. Jan 2011: CPIB launches investigations 

Next, it was reported that the Corrupt Practices Investigation Bureau (CPIB) launched a probe for the tender awarded by SSC to build the CMH. The investigations will check for any information leakage during the tender process, which would have given one party an advantage over the other parties.

 

Apparently a senior official at the motorsports development arm of the SSC and a few others have been summoned for interviews and lie detector tests. There was also talk that one or more SSC staff involved with the tender for the project had been looking at joining SG Changi, but it ultimately did not materialise.

 

The CPIB launched investigations last year, after it was tipped off about possible irregularities in the tender, with a senior official at SSC allegedly leaking information during the bidding process to give an advantage and also possibly taking bribes. I remember reading somewhere that the SSC took a few million dollars as consultancy fees for this project!

 

The tendering process was handled by the SSC’s motorsports department, which was set up in recent years to promote the sport here. Fan Chien Jen, SSC’s director of this motorsports department, was in charge of the project but has since left the body.

 

3. Feb 2011: Construction halts

Construction on the CMH finally started in December last year but it came to a halt when SG Changi failed to pay the S$50 million instalment for piling work. It was reported that S$10 million was to be paid on 15 February, after Murahashi secured a personal loan, but this never happened I guess.

 

Sakuma was quoted saying that “The amount will be enough to cover the entire cost of the piling work, but it is not going to cover the amount needed to complete the project. We have secured US$200 million from investors in Hong Kong that would have allowed us to do so, but they have frozen the funds.” Not surprising that the news of the CPIB probe did not sit well with investors and responded by freezing funds.

 

Work on the CMH stopped sometime before Chinese New Year and from 200 workers, there were only about 20 odd left on site. 

 

4. Mar 2011: Possible false bank guarantee 

Thia lodged a complaint with the Commercial Affairs Department (CAD) alleging that a bank guarantee submitted as part of the tender process may have been forged. He said that “the bank guarantee of US$180 million in funds should have saved the project when it came to standstill” and that “the Bank of Tokyo-Mitsubishi UFJ in Japan has since referred the matter to the Tokyo Police”.

 

5. Mar 2011: SG Changi sponsors racing teams

Despite having the lack of funds for construction, SG Changi managed to find money to sponsor a team in Super GT and Formula Nippon. When I was there at Autopolis last month, I saw Team SG Changi in action on the track.

 

Previously the team was known as RE Amemiya Racing and is competing in the 300GT class of touring cars with a Lexus IS350. 

 

ST_IMAGES_SPTPILE-C4N6. Jul 2011: Piling contractor sues

After halting construction earlier this year, the piling contractor CSC Holdings has decided to abandon the CMH project and might even be seeking legal action against SG Changi. About 30 per cent of the piling work has been done but the building equipment and materials have been packed up and are in the midst of being shifted out of the site. 

 

The packing up and moving away started two weeks ago and will be cleared out by the end of the month. Less than 10 workers were on site when The Straits Times visited the site yesterday. 

 

SG Changi is still bounded by the contract to deliver all the terms and SSC is expecting them to continue to comply with their commitments under the project agreement. Now it looks like SG Changi lacks the funds to get this project back on track and Thia has been quoted for hoping that an overseas investor can come onboard and salvage the project.

 

Well, the CMH project is definitely delayed now unless a huge injection of funds come in. I wonder how much more will be tolerated before a re-bidding of the project or government intervention will occur… if even possible in the first place. 

 

If and when the CMH eventually comes up, I can’t imagine how much it would be to use the track man. Would they charge us sky-high fees to compensate for all this?

 

Ok so Malaysia can heave a sigh of relief now as tracks like Sepang International Circuit and Pasir Gudang were planning major revamps. But I still think it is quite embarrassing that Singapore cannot even get a permanent track up privately…

Cheryl Tay

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Singapore’s only female full-time motoring and motorsports photojournalist. Independent automotive consultant and prominent local motorsports personality Cheryl Tay is uniquely passionate about all things cars and motorsports. She also has a strong passion to share her interest and knowledge, hence having a dream to become the ‘Oprah Winfrey of cars and motorsports’ and create a multimedia platform for her sharing. - A female in a male-dominated world, Cheryl Tay is Singapore’s only female full-time motoring journalist and motorsports blogger and she regularly writes for prominent titles in Singapore, Asia and internationally. (See full list of titles that Cheryl Tay writes for here.)

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