SGP F1: Beginning of the End, or End of the Beginning?
Besides the novelty of the first ever night race and putting Singapore in the international map with that feat, did Singapore bring in much vaunted tourism dollars with the F1? We don’t have the figures yet and hopefully the government can reveal a bit more about the dollars and cents in this world class act. It is all about money after all, and taxpayers money for that matter since the Singapore F1 is a venture between the government and tycoon Ong Beng Seng.
The government is footing 60% of the bill supposedly and we want to know whether it is money well spent so far in terms of return of investments, granted that the years since 2009 has been slightly unstable as far as the global economy is concerned and pulling in big global money now is an uphill task. While we can do our own sums, Thoughts of a Cynical Investor has already done the maths on tourism (albeit not specifically F1 tourism) and the returns do not look promising.
Government mulls F1’s future in Singapore
By Evelyn Choo | Posted: 25 September 2011 1824 hrs
SINGAPORE: The Singapore government has engaged independent consultants to review the value proposition of continuing with the Formula One Night Race here.
Giving an update on contract negotiations, Second Minister for Trade and Industry S Iswaran said authorities are hoping for a “mutually-beneficial agreement, sooner rather than later”.
And if Singapore does decide to go forward, it will do so “decisively”.
The five-year contract for the Singapore Night Race ends next year.
On many counts, the night race has been good for Singapore, says the government.
And the benefits are mutual, with F1 chief Bernie Ecclestone declaring the race to be “the jewel in the Formula One crown”.
But all eyes are on the pivotal agreement yet to be made by two important parties – the Singapore Grand Prix organisers and the Formula One administration.
Mr Iswaran said: “I’m hoping it doesn’t have to be too late, and we have obviously till the fifth year of the race for it to actually be concluded. But if we can find a way to take it forward, and I think that is also Mr Ecclestone’s interest in this matter and also SGP (Singapore GP), then I think we should be able to work something out sooner.
“But I don’t want to put a specific timeline on it, simply because I think we should allow the parties involved to do their work and come to the right conclusions.”
Under the terms of the current contract, Singapore could host the race for a total of seven years.
Mr Iswaran explained: “We have a five-year contract in the first instance with the extension of five years, which is at the option of the Formula One administration. So in other words, the Formula One Administration has to exercise the option for another five years.
“Now upon that, we have the option which is through SGP, the race promoter, the opportunity to then continue for five years or to say that we’ll just give two years notice and stop. In other words, there’ll be a minimum of seven years because of this structure but we can potentially go beyond that.”
Mr Iswaran added both parties should be given time to come to the right conclusions.
The government is doing its own preparations, embarking on a comprehensive review of the race.
Mr Iswaran said: “What we have on the government side (is), we have engaged independent consultants because we want to make sure that going forward, we have a clearer idea of what is the value proposition of the F1 for Singapore for all those dimensions I talked about – from the tourism point of view, the broader economic spin-off point of view, and social point of view.
“So we want to see what is the platform that it creates for us, how we can potentially get better value for it, how it will be situated in the context of a broader tourism strategy and complement our economic strategy. So that’s the scope of the studies that we’re doing.
“So as you can imagine, quite a few aspects to it. My own sense is that we need to have some kind of closure on this – certainly before next year’s race.”
The event has raked up some S$100 million worth of tourism receipts annually, and Mr Iswaran expects this figure to remain strong.
Visitor numbers have also been favourable – with more than 110,000 unique visitors coming to Singapore just for the race, over the past three years.
But like the Marina Bay street circuit, it does get a little bumpy – some retailers in the vicinity have long complained of the dip in shopper traffic during the race due to road closures.
Mr Iswaran said the logistics team has tried to deal with this consistently since 2008.
He cited a strong engagement programme with stakeholders, and will be looking at how else the situation can be mitigated.