$50m jump in quotes for Perth stadium

The WA Government is facing a potential $50 million blow-out in delivering Perth a new indoor stadium, raising fresh concerns about its ability to deliver its record $15.8 billion capital works program on time and budget.

Mirvac Fini, one of only two private developers to have expressed interest in building the new multi-purpose indoor stadium, has told the Government it is no longer interested in the project.

While the Government is offering $50 million towards the cost of the new stadium, Mirvac Fini chief executive Adrian Fini told The West Australian the State would have to contribute almost twice that amount to make the deal stack up.

Those cost concerns were echoed by Multiplex, which is the only developer still interested in building the new facility, less than a month out from the Government's July 14 tender deadline.

The prospect of a circa-$50 million blow-out in the Government's budget for the indoor stadium is the latest example of where Labor's record $15.8 billion infrastructure program - the centrepiece of May's State Budget - is coming under increasing pressure.

Treasurer Eric Ripper conceded yesterday that managing that capital works program was one of the biggest financial challenges the Government faced.

With the Burswood Dome earmarked to be demolished in 2007, the indoor stadium is critical to Perth's chances of retaining one of its few remaining international events, the Hopman Cup tennis, and to keep Perth on the international concert tour map.

Multiplex spokesman Charlie Robertson said he believed Mr Fini's cost estimates were accurate. Multiplex has raised two options for the new indoor stadium - redeveloping the mothballed Perth Entertainment Centre in Wellington Street or building a new stadium next to the State Tennis Centre at Burswood.

The cost blow-outs appear to leave Housing and Works Minister Fran Logan with little option but to increase the Government's $50 million offer if he hopes to deliver Perth a stadium suitable for big indoor sports events and concerts. As it stands, the Government's $50 million pledge is even less attractive because it is not being offered as a lump sum to the private developer, but drip-fed over 20 years from when the stadium is built.

Hopman Cup chief executive Rick Williams said that while event organisers wanted to keep the tournament in Perth, they would have to look at other options if there was no suitable venue.

WA Events Industry Association president Camille Bradsmith said it had always been apparent that $50 million was never going to be a big enough con tribution to deliver Perth a suitable indoor sports and concert venue.

Mr Logan said he would not comment on the tender process until the final bids were lodged.

He confirmed he had invited Mirvac Fini to submit a non-complying bid after being notified the developer was withdrawing from the tendering process. However, Mr Fini said he did not intend doing so because he could not see how the project could be viable.

Mirvac Fini had proposed to build the indoor stadium at the Claremont Showground in a joint venture with the Royal Agricultural Society.

Mr Ripper said the Government was not insulated from the effects of the rising cost of materials such as steel and the skilled labour shortages.