Govt's $15m has strings attached

Failure to meet construction targets for the Forsyth Barr Stadium project could result in the Dunedin City Council being given just 20 working days to repay the $15 million Government grant for the project.

The bottom line was included in terms and conditions attached to the Government's grant, released to the Otago Daily Times yesterday following a request under the Official Information Act 1982.

The terms also required the council, together with the Carisbrook Stadium Trust, to provide regular progress reports on the stadium's construction every three months to the Minister for the Rugby World Cup 2011, Murray McCully.

The reports were to provide updates on construction of the facility, detail spending to date and list any problems arising, or that were expected to arise, at the site, including delays and risks to the project.

Contacted yesterday, Dunedin Mayor Peter Chin said there was "nothing untoward" in the terms, and he was confident the stadium would be delivered on schedule.

"The money has been received, the terms and conditions agreed upon, and we are proceeding to meet all the conditions.

"The key to it is to be able to complete the stadium on time and on budget, which has always been our goal," he said.

CST chairman Malcolm Farry also believed there was "nothing unexpected" in the agreement, and he was "happy to sign it because we know we could comply".

"Such a significant grant of money carries with it some significant responsibilities.

There's nothing we have been asked to comply with that we have any difficulty with."

Included in the deal was a clause allowing the Ministry of Economic Development to request a partial or complete repayment of the grant if, for any reason, the stadium did not host games at the Rugby World Cup 2011.

The ministry would have to give 20 business days' notice to have the money returned, but could request the money whether it had been spent or not.

Failure to complete the stadium on time, or any other breach of the agreement unable to be remedied, could lead to a request for repayment.

However, Mr Farry said the conditions represented a "worst-case scenario".

"We don't consider there's any possibility that the worse-case scenario . . . has got any chance of actually being the actual scenario."

CST officials have previously acknowledged the tight timeframe to be met to complete the stadium in time for the Rugby World Cup.

But when asked yesterday what would happen if the grant was spent but the stadium's completion delayed beyond the Rugby World Cup, Mr Farry said he did not want to speculate on a "bizarre scenario".

"We will make the Rugby World Cup, so it's a hypothetical question . . . Pigs might fly as well.

"It not a scenario anyone involved in this project is giving any credence to."