Billion-dollar investment and private capital firms will bid for the right to partner with the Tasmanian government and deliver the Macquarie Point precinct development — including a 23,000 seat roofed stadium — as part of a blockbuster public-private partnership agreement.
The government, in need of private capital to fund the precinct and stadium, will select a private partner as part of a competitive bid process — and one of the nation’s biggest private capital firms has confirmed to the ABC it will throw its hat in the ring.
The ABC can reveal Plenary Group, which was co-founded and chaired by Richmond football club president John O’Rourke, will bid for the right to deliver the broader Macquarie Point precinct, including the stadium.
Managing director Damien Augustinus told the ABC that the Tasmanian government had a “golden opportunity” to partner with the private sector to deliver the project.
“We support the consideration being given to the stadium and surrounding precinct being procured as a public-private partnership” he said.
“The Tasmanian government has a golden opportunity to partner with the private sector to finance, deliver and manage a world-class sporting, tourism and entertainment precinct for decades to come.”
In a statement, a spokesperson said the Tasmanian government was “considering a variety of options for partnering with the private sector and we will choose an approach that delivers the best outcomes and value for Tasmania”.
But the ABC understands the stadium and elements of the broader precinct could be bundled by the government in what’s known as a ‘design, build, finance, and maintain’ project, with high powered consortiums, set to jostle for the rights to the contract.
Confirmed interest will come as relief to the government after capping state taxpayer funding for the Macquarie Point project to $375m, with a further $240m committed by the federal government and $15m from the AFL.
Under a public-private partnership (PPP), assets including the stadium would be wholly owned by the Tasmanian government, with Stadiums Tasmania to operate the arena.
However, responsibility for financing, management and maintenance of the precinct would fall to the successful consortium, with the government to then make a yearly or quarterly payment to the consortium over the life of the deal, which would likely be 25 or 30 years.
After the contract period, the management and maintenance of the precinct would fall back to the government.
Final bill likely to exceed a billion dollars
A similar model was employed by the West Australian government for Perth Stadium with the government contributing 60 per cent of capital costs towards the project, and the remaining 40 per cent picked up by the Westadium Consortium.
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Under that arrangement, the WA government is expected to make a cost saving of 21 per cent over the life of the deal, equating to about $320m.
The total level of investment at Macquarie Point is highly likely to exceed $1 billion, with the stadium alone budgeted at $715m.
With that number likely to balloon, the amount of private capital will need to be in the hundreds of millions to cover any increased cost and the broader precinct build.
The public-private partnership model could provide a pathway for Dean Coleman’s Stadia Precinct Consortium — which is believed to include a prominent financier — to bid for the partnership rights, in the wake of his stadium 2.0 proposal at nearby Regatta Point being knocked back by the Tasmanian government.
Plenary was the key partner in Melbourne’s $1.75b Convention and Exhibition Centre and South Wharf precinct, as well as the $1.5b Footscray Hospital and $456m Geelong Convention and Event Centre.
‘A competition of ideas’
Infrastructure Partners Australia chief executive officer Adrian Dwyer says the bid process is likely to attract plenty of big fish.
“A number of consortia would compete against each other in order to best meet the outcome, at lowest cost to taxpayers,” he said.
“Would there be interest? Absolutely. The talk of the Macquarie Point stadium amongst PPP providers that I talk to is very high, and you’d expect a very competitive field to line up.”
Mr Dwyer said the public-private model is designed for governments to shift most of the risk on to the private sector.
“Government gets, in return for availability payments or up-front capital contribution, the ability to transfer the risk in delivering the project. And then in operations it is then able to have a KPI regime around delivery of the asset,” he said.
Those KPIs would include conditions around upkeep, maintenance, and delivery of events.
The government will stipulate a 23,000 seat roofed stadium must be constructed, as well as social and essential worker housing, which was part of its agreement with the federal government to secure $240m of funding for the site.
But bidders will pitch a bevy of ideas for how the mixed-use element of the precinct might look, with a convention centre and hotel likely to be part of any successful bid, in what Plenary managing director Damien Augustinus described as a “competition of ideas.”
Good news for Tasmania Devils
If Plenary is successful, it would indirectly strengthen the tie between the fledgling Tasmania Football Club and the Richmond Tigers, with Tasmanian born Richmond CEO Brendon Gale already linked to the new chief executive role at Tasmania.
Former Richmond champion and Tasmanian Jack Riewoldt has also played a major role in the formation of the Devils.
Tasmania football club executive director Kath McCann said private interest in the stadium was “really positive” for the team, which requires the stadium to be built for round 1 of the 2029 AFL season.
“The more people that come on board, whether that’s private sector, public sector, not for profit the better,” she said.
A Hobart stadium now has bi-partisan support in the Tasmanian parliament, with Tasmanian Labor switching its stance from opposition to support earlier this week.
However, Labor Leader Dean Winter did not directly endorse the Macquarie Point proposal, believing the rival 2.0 – or Mac2 — proposal still deserved consideration.
The Greens remain firmly against any Hobart stadium development.
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