Albert Park Is Not A Cost-Effective Grand Prix Venue
Overseas experience indicates that the most cost-effective circuits are either

• world class purpose-built permanent circuits (14 of the current 21 venues used since 1992) which can be used for all year racing including motor cycle racing, vehicle testing and advanced driving, or
• abandoned, unused or degraded sites where, although the initial costs might be high, the circuit increases the net value of the site. At least nine GP circuits fall into this category including those used for the British, Canadian, Malaysian and Hungarian GPs.

In 1993 alternative sites like Sandown or the yet to be developed Docklands were available. Albert Park Reserve was selected as the venue for the Grand Prix without the release of any detailed cost-benefit analysis of the event or the site.

	Albert Park, 1996 - 2000	Sandown, 1996 - 2000	Adelaide, 1991 - 1995
Construction & establishment costs	$60+ million	$10 million	$26 million
Annual set-up costs	$80 million	$18 million	$34 million
Total over 5 years	$140+ million	$28 million	$60 million

Note that these totals do not include

• park restoration costs
• compensation to park users & local business
• the licence & franchise fees payable to Bernie Ecclestone (FOCA) believed to be $20 million per race
• other staging costs such as administration, marketing, policing, race week staff, etc.

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Why Albert Park Reserve Has Cost More
1. Higher Track Costs
Warnings by motor sport figures that the conversion of Albert Park would be expensive have proved correct. Conversion has involved

• construction of a new 5.26 km circuit to replace the existing park roads
• extensive and unnecessary modifications to the Park involving felling of over 1050 trees, reorganisation of sports fields and facilities
• construction of a new permanent pit garage complex of which only part is used between GPs

Total expenditure on the circuit and infrastructure for the Adelaide GP up till 1994 was only $26.0 million. The Victorian Government has spent $60 million of public funds towards the establishment of the Albert Park GP circuit.

2. Higher Temporary Infrastructure Costs
The use of a relatively long temporary circuit within a public park involves

• higher safety barrier and spectator fencing costs
• high costs of erection, removal and storage of grandstands, corporate facilities, gravel run-offs, fencing, concrete crash barriers, and repairs to park surfaces

After the experience of holding four races at Albert Park, the Melbourne GP still costs 40% more to stage than the last race in Adelaide - $47 million compared with $33 million.

3. High Costs to Present Park Users
Albert Park Reserve is one of the most popular of Melbourne's Parks, used by people from over 100 different postcodes, and is the acknowledged home of amateur sport. Comprising 60% of the public open space of the City of Port Phillip, the Park is a significant local open space amenity.

In 1993 64% of its patrons used the Park daily or weekly. Parks Victoria currently estimates the total annual number of individual park visits to be over 3 million.

The annual one week closure means loss of access to all golf facilities, all 22 sports grounds, most of the Melbourne Sports and Aquatic Centre, and a range of other recreational facilities.

Overall, Victorians lose the right of free and full access for at least 17 weeks each year. The public golf course is closed for five weeks. GP works affect 21 sports fields, and the lengthy set-up period results in damaged surfaces on 15 sports fields . The use of one oval as a gravel run-off makes it unusable for winter sports; other grounds are not available until mid-May or later.

4. Higher Social and Environmental Costs
The extreme noise, traffic congestion, parking restrictions and road closures all impact on

• childcare centres and kindergartens, 12 schools, 4 hospitals, and 17 homes for the elderly located within 1 km of the track.
• the 114,000 people living within 3 kms of the track
• adjacent visitor attractions such as the Botanic Gardens and Fawkner Park.

5. Higher External Economic Costs
Commuters suffer costs of the total closure of Lakeside Drive for three weeks, as well as other local road closures during the race period.

Local business is adversely affected by noise, parking and traffic disruptions, the difficulty of access to home-based and commercial business offices, avoidance of the area by regular customers, and the week-end exodus of many local residents.

Over 50% of local traders in the City of Port Phillip reported a decrease in turnover during the 1996 Grand Prix period. A survey in 1998 had similar findings.

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A Temporary Circuit Means High Costs For Limited Benefits
While 4 of the 9 Formula One Grand Prix circuits built or redeveloped since 1985 have been financed with government funding, Australia alone has chosen to rely on temporary circuits. The other seven are all permanent circuits which can all be used for motor sport all year round, for testing and for advanced driving training. In particular the newly finished Sepang International Circuit is planned to be

• an integral part of the country's new automotive research and development.
• a centre for motor sport development.

The decision to use Albert Park means an event which

• has required wasteful investment in motor sport infrastructure in a public park with no lasting benefits to the sport.
• depends on taxpayer-funded subsidies, totalling so far over $90 million.
• needs higher staging costs to attract fewer visitor nights than did the 1992 Adelaide GP and has a very high staging costs to visitor ratio.
• relies for its economic justification on unproven benefits from the promotion of Melbourne.

Two reports on the South Australian economy by the South Australian Centre for Economic Studies (March 1994 and December 1995) concluded that the Grand Prix had provided no real economic benefit to the SA economy (The Advertiser, 25/3/94, 1/12/95). The Canberra-based Industry Commission has estimated that over the 11 years the GP had a negative impact on per capita State Gross Resident Product, its preferred measure of the well-being of South Australians.

The venue involves high opportunity costs which significantly reduce the economic benefits to the State and make the Grand Prix a poor investment compared with other major sporting events. See Factsheet 78 - This Event is a Loser.

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