Independent review of Hobart’s new AFL stadium reveals likely cost blowout

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.