Spence calls on Townsville Council to pay half V8 event cost increase

Sport Minister Judy Spence today called on the Townsville City Council to pay half of the cost escalations for the V8 event.

The Minister warned the event may have to be scaled back if that does not happen.

Ms Spence told parliament she will introduce a Bill this Thursday designed to enable an annual V8 Supercar event to occur in Townsville from July 2009.

“In March 2007, the State Government approved a funding package of $12.32 million to meet the capital costs for construction of the event precinct.

“These costs were first estimated in May 2006 for a potential event in July 2007.

“The Townsville City Council originally committed $2.6 million to the capital costs and the Rudd Labor Government has committed $10 million.

“However, the cost estimate for construction has increased since May 2006 from $25 million to $30.78 million. This is largely due to the booming construction market in Townsville and increases in the price of materials and labour in the last three years.

“The State Government’s support of the Townsville V8s has always been contingent on a 50/50 split of any escalation costs associated with the event.

“The costs of staging the event have increased by $6million in the last 2 years since the original costings were done, which means the State Government and the Townsville City Council are liable for an extra $3 million each.

“But the Townsville City Council have told me they are only willing to put in just $900,000 toward their $3 million contribution, meaning the Townsville City Council are shortchanging us by $2.1 million.

“This Government is committed to making the Townsville V8 event become a reality.

“However, the State Government will only match whatever funding the Council contributes towards the additional capital costs. No more, no less.

“If the Council is prepared to meet 50% of the additional capital costs for the event precinct then the State Government will fund 50%.

“If Townsville City Council do not want to contribute their fair share, then we will simply match what they do contribute and scale down the event accordingly,” Ms Spence said.

Ms Spence said the V8 Supercar series is the third most watched sport in Australia and this Event will provide national and international exposure to Townsville.

It is expected the event will generate an estimated $10 million per year in ongoing economic benefits to Townsville and create 130 full time equivalent jobs during construction and an additional 180 equivalent full time jobs as a result of hosting the event annually.

The event will showcase Townsville to an international audience and attract many thousands of visitors to the city who will pump money into local accommodation and businesses.

Ms Spence said: “Council needs to confirm it will provide its share, 50% of the cost escalation, or explain to the Townsville community why council is not supporting what has the potential to be a great event for the city.

“For these reasons the Bill I will introduce this week will sit on the table of this House until such time as the Council’s contribution to the event is resolved.

“The State Government’s commitment is clear. If the Council covers 50% of the increased cost then the State Government is prepared to increase its commitment towards capital costs to $15.18 million.

“In addition to the capital costs, the Government will also provide $2.5 million annually, for 5 years, towards staging costs. So the Government’s total commitment stands at $27.68 million over five years.

“I visited the site of the Townsville race earlier this month and I think it has great potential. I also met with the Mayor, I think we both want the race to proceed.

“There are now time imperatives which make the resolution of these funding issues a priority and I will continue to talk to the Council to effect a resolution,” Ms Spence said.

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