RAW: Adelaide Oval Update – Costs Blow Out

Keen followers of this debate will recall that at the time of the 2010 State election, voters went to the polls believing the total cost of the project would be $450m, the works themselves $365m after taking out the retirement of the SACA’s debt. These included the footbridge across the Torrens.

Well, Kryztoff understands from well placed government sources that the quantity surveyors have reported to the Government that in their view the works will now cost between $700m and $800m and this doesn’t include the footbridge. So one can now confidently predict the costs of the announcement the Labor Party had to have are double the original estimates.

Incoming Premier, Jay Weatherill, should bear this is mind when he contemplates his announcements on the project this weekend along with the fact that at the end of November, two years will have passed since SACA and SANFL leaders strode across Adelaide Oval smiling like teenagers after their first big night out together to announce an agreement in principle had been reached about how the joint arrangements for the oval would operate and things are no closer it seems now than then for the real agreement in detail. Followers of this debate may also recall that then Premier Mike Rann delivered two ultimatums to the parties to get their acts together, the latter of which expired over 13 months ago.

Does all that much matter? Well, yes. As previously reported, the continuing negotiating impasse is costing SACA members $600,000 a month in interest on the debt the Government will take over upon the agreement being reached (and then agreed to by the Government.) Fears must now be rising that the SACA will run out of cash if this matter is not resolved soon.

And, yes, the blow out in costs does matter, notwithstanding ‘the game changer’ the project is meant to represent. Beyond the fact that legislation that passed the parliament capped spending on the project at $535m (including the SACA debt) Jay Weatherill now confronts a $3.8b gap between current State debts and that required to continue to satisfy the ratings agencies that this State warrants AAA status. This is after around $8b has been lost these past three years of Premier Rann’s tenure.

While media talk that a few millions lost on car parking fees in hospitals and some GST revenue shortfalls from the Federal Government ‘may threaten’ the AAA rating, the reality is that only by reining in big ticket items such as Adelaide Oval can Weatherill resist having the economic credentials of the government he leads to the next election trashed by downgrades.

Given Kryztoff understood only three members of the Labor cabinet liked the Adelaide Oval project anyway and two of those are now gone, (Pat Conlon being the sole survivor), Weatherill now faces an acid test – what’s good for the State or what he thinks may be good for votes in two years time.

Given the parties themselves remain in squabble mode, this may well be a good time for the new premier to make his mark and tell us all that ‘we simply can’t afford this now, especially as the parties involved have had more than enough time to tell us how this will operate and can’t. Let’s defer for a few years until Roxby Downs kicks in. Here’s some money for Port to play their games at Adelaide Oval as it is.’

We will know soon enough but followers of this debate will also recognise that cost blowouts and age long fighting between football and crciket interests were always flagged as likely problems and certainly ones that should have been resolved before the SACA members were made to vote on the issue in May.