78666

A Tasmanian Government-commissioned independent report into Hobart's proposed new AFL stadium has found the costs of the project have been significantly underestimated while its benefits have been overestimated.

Economist Dr Nicholas Gruen's report has expressed concerns that the project displays "the hallmarks of mismanagement" and will likely cost more than $1 billion, a significant rise on the project’s projected price tag of $775 million.

While the Tasmanian Government has repeatedly pledged - including at the last state election - to cap its investment in the stadium at $375 million, Dr Gruen has said this commitment "cannot be met".

Funding for the venue has been committed as the $375 million from the Tasmanian Government, with the Federal Government committing $240 million, the AFL adding a further $15 million and the remaining amount to come from the private sector.

However, Dr Gruen indicates that the 23,000-seat venue will likely end up costing more than $1 billion, noting, in his report that the costs are "significantly understated", benefits "overstated", and the projected $775 million price tag is unrealistic.

The report also suggested the wrong site was picked for the stadium, as other locations that likely had a lower cost and more community support were rejected.

Dr Gruen wrote "the site selection analysis released was hasty and partial and gives the strong impression of being crafted to support conclusions already made.

"I think it likely that the site selection process rejected sites that would have generated lower costs and higher benefits while receiving greater community support."

It finds fault with the AFL's agreement with the Tasmanian Government, describing it as imposing "needless costs and restraints on the realisation of a Tasmanian team", argues the timeline for the project is unrealistic and site selection was flawed.

Dr Gruen suggests that a more realistic timescale for the construction of the stadium will see it taking up to seven years - not meeting the timeline of Tasmania’s AFL team entering the competition in 2028.

The report also finds fault with the AFL's agreement with the Tasmanian Government, describing it as imposing "needless costs and restraints on the realisation of a Tasmanian team", arguing that the timeline for the project is unrealistic and site selection was flawed.

Dr Gruen’s report added that the project has shown the “hallmarks of mismanagement”.

Upon releasing the report on Friday morning, Tasmanian Minister for Business, Industry and Resources, Eric Abetz advised “we thank Dr Gruen for his work, and in preparing the report", adding that the Tasmanian Government was "moving ahead" with delivering the project.

2022 report showed $750 million stadium cost a ‘ballpark’ amount
As reported by Australasian Leisure Management in 2022, the original $750 million cost of the stadium suggested at the time of the project’s unveiling in March that year was merely a "ballpark" amount.

Documents showed that the first time costs to build the stadium were discussed by Tasmania's State Growth Department was on 22nd February 2022 - one week before it was announced to the public

On 23rd February, the Waypoint consultancy provided a "ballpark" estimate of cost, noting "there is no design, no site information and no defined scope at this stage".

Images: Concepts for the new Hobart Stadium. A development application for the proposed multi-purpose stadium has been lodged by the Macquaire Point Development Corporation. Credit: MPDC.

Related Articles

20th November 2024 - Tasmanian Government names location for new AFL High Performance Centre

15th November 2024 - City of Launceston votes to transfer the ownership of UTAS Stadium to Stadiums Tasmania

23rd October 2024 - Tasmania’s Bellerive Oval to be known as Ninja Stadium after naming rights deal

25th September 2024 - Tasmanian Parliament hears that cost of three-storey car park excluded from budget for new Hobart Stadium

18th September 2024 - Cost of new Hobart Stadium to rise by $60 million as economic cost questioned

7th May 2024 - Tasmanian opposition changes stance to support Hobart stadium plan

19th March 2024 - AFL launches colours, logo and guernsey for new Tasmania Devils teams

22nd February 2024 - AFL Chief Executive Andrew Dillon firm on Hobart Stadium requirement for new Tasmanian team

15th February 2024 - Tasmanian Premier makes election pledge to limit state government’s contribution to new Hobart Stadium at $375 million

11th December 2023 - Tasmanian Government launches community consultation for Hobart Stadium project

9th November 2023 - Plans for new Hobart stadium reach major milestone

22nd May 2023 - Tasmanian Government releases detail of deal with AFL for Hobart Stadium

20th May 2023 - AFL Chief Executive warns Tasmanian objectors ‘no expansion team without new Hobart Stadium’

29th April 2023 - Australian Prime Minister Anthony Albanese announces $300 million funding for new Tasmanian stadia

23rd February 2023 - AFL makes $360 million commitment for Tasmanian team funding contingent on new Hobart stadium

3rd February 2023 - Directors appointed to new Stadiums Tasmania board

20th January 2023 - Cost-benefit analysis says proposed Hobart Stadium would deliver $306 million deficit over 20 years

4th June 2022 - Documents suggest cost of Hobart stadium will be higher than $750 million

---

Support our industry news service
We hope that you value the news that we publish so while you're here can we ask for your support?

As an independent publisher, we need reader support for our industry news gathering so ask that - if you don't already do so - you back us by subscribing to the printed Australasian Leisure Management magazine and/or our online news.

Click here to view our subscription options.