The WA Cricket Association's ambitious $500 million ground redevelopment has collapsed after warnings from the State Government that it was at risk of losing World Cup matches.
The WACA yesterday cancelled the development, claiming it could not raise enough finance through pre-sales of the planned apartments on its East Perth grounds.
But The West Australian has obtained two confidential documents showing big problems with the redevelopment, including independent analysis showing it was not worth the risk.
The Department of Sport and Recreation's warning came in an October 29 letter that the project's construction schedule could prevent it from hosting World Cup matches in 2015 as planned.
It is understood there were fears the organising committee would revoke hosting rights because vision of a construction site would breach the event's TV broadcast rules.
The department's director of facilities and camps, Rob Didcoe, also raised concerns that the development was not commercially viable and that there was no profit or benefit for WACA members.
Mr Didcoe warned the project exposed the WACA to substantial financial and reputational risks which, if realised, would "dis- advantage cricket in Western Australia".
An analysis in a draft report by PricewaterhouseCoopers, in a December 5 document labelled "strictly private and confidential", reveals the WACA would probably earn a $5.8 million profit, or as little as $2.4 million, from the redevelopment. "The project as a whole does not generate a commercial return to compensate the WACA for the risks that it is assuming," it said.
It also said: "The project is not value accretive for the WACA both in nominal and present value terms."
The PwC analysis said the project would reduce annual ticket revenue for several years by up to $271,000 because of the temporary loss of more than 500 seats.
Chairman Sam Gannon said the board had cancelled the plan because it would not meet a January 1 deadline for its pre-sales target.
The PwC document said it had to pre-sell 63 per cent of apartments under it finance terms.
"That meant the risk was too great for the board to go ahead," he said.
Mr Gannon said the board would regroup and consider other strategies.
"There is no risk to the World Cup matches now," he said.
The WACA will have to pay Ascot Capital at least $3 million for preliminary works, but retains intellectual property and approvals.