COUNCIL IN £2M LOAN TO EQUIP NEW GROUND

3 March 2005

Swansea's new stadium is being loaned £2 million by the council to help fit it out. Cash is needed to fully equip the new 20,200-seat ground in Landore ready for its summer opening.

The money will buy kitchen and bar equipment, lockers, furniture and other items.

The bulk of the cost will be met by the stadium's management company StadCo, which is made up of representatives from Swansea Council and the city's football and rugby clubs.

But the council will fund purchases with a £2 million interest-free loan to the company.

Money is needed because the overall cost of the scheme, which includes transferring sports facilities to other parts of the city, has risen to £43.4 million from the last estimate of £41.8 million.

A report to councillors says: "As is inevitable in a scheme of this size and complexity, a number of elements within the budget have needed variation with, as a consequence, some cost increases and some reductions.

"In addition, the budget for fit out has been found to be inadequate."Part of the £2 million loan will cover the £800,000 that has so far failed to materialise for naming rights at the stadium.

Bastion, the company in charge of selling the rights, has now invited official bids and hopes to have a main sponsor in place by the end of June. It says advertising rights could be worth around £500,000 a year.

The report to councillors said: "In order to provide the capital funding, it is proposed that the council make a loan to the company of up to £2 million repayable at no net costs to the council.

"This revised proposal places the risk of raising sponsorship income with the stadium management company and allows up to an additional £1.2 million of investment at no cost to the council.

"The loan will be over 20 years and will be secured on the equipment it buys but the report warned: "Nevertheless there is a remaining risk to the council should the company default on its repayments."

As well as the £2 million loan, Swansea Council has given £6.8 million to the scheme, £450,000 more than was originally planned.

The project will deliver the new stadium, which cost £27 million to build, including the cost of moving facilities from the old Morfa stadium to elsewhere in the city.

The new ground is expected to open in July.