OPENING REMARKS BY MR S ISWARAN, MINISTER OF STATE FOR TRADE AND INDUSTRY, AT THE PRESS CONFERENCE ON THE FORMULA 1 SINGAPORE GRAND PRIX AT URA CENTRE THEATRETTE ON 11 MAY 2007
Thank you all for coming to this press conference at short notice.I am pleased to be here this afternoon with Mr Ong Beng Seng and Mr Lim Neo Chian.We are also glad to be joined via teleconference by Mr Bernie Ecclestone, Chief Executive of the Formula One Group.
I think our presence here speaks for itself.We are pleased to announce that Singapore will be hosting the Formula 1 Grand Prix from 2008.Singapore GP Pte Ltd, of which Mr Ong is the controlling shareholder, has secured the rights from the Formula One Group to host an F1 race in Singapore for 5 years from 2008, with the option for FOA (Formula One Administration) to extend for a further 5 years thereafter.The Singapore Tourism Board (STB) has evaluated the company’s proposal and found it to be worthy of support.The first race will take place in September or early October 2008 in a street circuit around Marina Centre.
First Night Race in the World
I am also pleased to announce that Singapore could potentially stage the first-ever F1 night race.A night race will be unique, different and allow the Singapore event to reach out to television audiences in Asia, Europe and the US.Safety is of paramount concern to all of us.Therefore, we will proceed with a night race only if the safety and operational requirements of all parties including the FIA, FOA and Formula 1 teams are fully met.If not, we will revert to a day race.
Economic Benefits and Positive Spill-overs from F1
Let me now briefly touch on our strategic rationale for hosting an F1 race. Singapore is a leading business centre and our aim is to be a vibrant global city that is abuzz with high quality entertainment and events.A world class event like the F1 race, with more than 500 million viewers worldwide, will take us closer to this objective.F1 will give a strong boost to our tourism sector.It is expected to generate incremental tourism receipts of about S$100 million a year.Hotels, night spots, restaurants, retailers, airlines, taxi drivers, and many other groups will benefit.The hive of activity surrounding the race will create opportunities for individuals and companies alike.Neo Chian will elaborate on this.
There will be broader economic spin-offs as well.Our growing private wealth management industry, strong contingent of MNCs and local companies, and diverse retail and entertainment establishments can all take advantage of the event to derive benefits for their clients and their business.
Government will Co-fund the Event
As I said in Parliament earlier in March, F1 is a major financial undertaking for any company.The annual cost of staging an F1 race can be up to S$150 million.Revenue from ticket sales, merchandising and sponsorship will defray some of the costs.However, given the larger economic benefits from an F1 race that do not accrue to the Race Promoter, there is a case for commensurate support from public funds.STB will, therefore, co-fund about 60 percent of the cost of the event from the Tourism Development Fund.
Need for Support from Hoteliers ….
However, the Government cannot do this alone. While the tourism-related businesses and the economy, in general, will benefit from the F1 Grand Prix, the hotels, in particular, will be significant beneficiaries.Hotels in Monaco and Melbourne, for instance, are near full occupancy and are known to raise their room rates by up to 2 to 3 times, with stipulated minimum stays of 3 to 4 nights, during the race period.We expect hotels in Singapore to benefit similarly and we need our hotels to contribute their fair share.
The Government, therefore, intends to impose a special F1 cess on hotel room revenues to defray some of the cost of staging the F1 race in Singapore.The F1 cess will be for a limited period of about 7 days around the race.It will be tiered so that track-side hotels which will benefit from the highest increases in room rates will pay a higher rate, and those further away will pay a lower rate.We are looking at a cess of no more than 30 percent to ensure that hoteliers still keep a significant share of the upside whilst making a meaningful contribution.The F1 cess is expected to raise an average of about S$15 to S$20 million per year.
We have consulted members of the hotel industry, including members of the Singapore Hotel Association (SHA) EXCO, and the feedback has been positive.More details will be announced when ready.
… And Other Stakeholder.
We will also need the support of other key stakeholders.These include building owners, retailers and the general public.
As some roads will have to be closed in the period leading up to the race, during the race days, as well as after the race, there will be disruption to traffic.There may also be some access restrictions around the track during the race period.We will need the understanding and cooperation of all Singaporeans and stakeholders affected by such inconveniences.I would like to assure everyone that our Government agencies will work closely with all stakeholders concerned to minimise any disruptions and inconveniences.We will set up an inter-agency committee for this purpose to work in partnership with the Race Promoter to ensure that Singapore stages a world-class F1 race whilst doing our best to mitigate the inconveniences.
Broad Participation and Involvement
In conclusion, let me say that, over the past few months, there has been a palpable buzz at home and internationally at the prospect of Singapore hosting an F1 race.Singaporeans from all walks of life are excited and we share their excitement.By holding the race on a street circuit in Marina Centre, we will bring the buzz and excitement into the heart of the city, so that everyone can join in the festivities.And there will be ample opportunity for broad-based participation in the event - whether as a guest, a spectator, a volunteer, or simply to participate in the events that will be held around the race.
I would like to thank Mr Ong Beng Seng and his team, Mr Bernie Ecclestone, and our officers at MTI and STB for their tireless and patient work over the past few months to bring F1 to Singapore.We still have a long way to go before reaching the chequered flag, and I look forward to the support of our government agencies, various stakeholder groups and all Singaporeans as we work towards an excellent Formula 1 Singapore Grand Prix which all of us will be proud of.
Let me now invite Mr Ecclestone followed by Mr Ong and Neo Chian to share their thoughts.