Grand Prix Corporation chief executive Andrew Westacott responds to revelations that Victoria pays $30 million a year for the rights to stage the Grand Prix in Melbourne

EXCLUSIVE: VICTORIANS are paying more than $30 million a year for the right to host the Formula One Grand Prix under a top-secret deal with billionaire Bernie Ecclestone.

The Herald Sun has seen Grand Prix documents that reveal the overall cost of Mr Ecclestone's licence fee - kept secret by four successive state governments for almost two decades - for the five-year contract is close to $170 million.

The documents, dating from 2010, expose an "escalator" clause in the contract that sees the licence fee rise by five per cent annually - regardless of how the Albert Park event fares.

In revelations that have sparked renewed debate about the race, the documents show the licence fee climbs from $US31 million in 2011 to almost $US38 million in 2015.

The fast life of Bernie Ecclestone

The documents detail only the current contract. Using the figures as a basis for estimates, the overall sum sucked from state coffers for the 15 races up until 2010 could total hundreds of millions of dollars.

Under the terms of the contract, signed by the Brumby Labor government, the fee started at $US31 million for the 2011 race. This soars to $US37 million in 2015.

The fee demanded by the sport's chiefs to stage the 2012 race was $US32.5 million, the documents show - more than half the $56.7 million Victorian taxpayers paid overall to subsidise that event once other expenses such as building and dismantling the Albert Park circuit were included.

Under the deal, the licence fee for this year's high-octane race - set for March 14-17 - will suck $US34 million from the pockets of Victorians before other expenses are added.

Tourism and Major Events Minister Louise Asher this morning said the Grand Prix was a "terrific" event for Melbourne but did cost taxpayers too much at the moment.

Ms Asher she while she was unable to comment on Mr Ecclestone's fees, because of the Grand Prix contract terms, her job was to lower the overall cost of hosting the race.

The current GP contract was negotiated by Labor, but Ms Asher conceded it was difficult to negotiate on licensing fees because Mr Ecclestone could move the race to another city willing to pay more.

"My responsibility as Minister... will be to evaluate what is most benefit to taxpayers as we sit down to negotiate," she said.

"I'm going to go to the table in good faith, to have a proper discussion about whether Melbourne can retain this Grand Prix.

"I think the event is terrific, but at the moment it's costing too much money."

Ms Asher said the government had nothing to do with the leak of Mr Ecclestone's fees, and she hoped it wouldn't affect the price her government paid for future events.

The Tourism Minister said she was unable to "confirm or deny" the size of the race licensing fees revealed by the Herald Sun.

The Grand Prix is still vital to Victoria's competitive edge, Ms Asher said.

"There's an economic benefit to this race of between $32 million and $39 million but more importantly there's a branding benefit to Melbourne from the Grand Prix," she said.

"In terms of tourism, Sydney has the Opera House, Queensland has the Great Barrier Reef, central Australia has Ayers Rock. We in Victoria, both sides of politics, have tried to position Melbourne as a major events capital."

Asked to comment on the figures from the documents last night, Australian Grand Prix Corporation chief executive Andrew Westacott said: "Our contract is a confidential contract. I am not in a position to communicate the specific details."

Mr Westacott said both parties were bound by contractual obligations not to disclose details.

Defending the event, he said it was good value for Victorians and was delivered at the lowest possible cost for maximum benefit.

"Melburnians have got to realise major events don't grow on trees. They cost a lot of money to stage," he said.

Staging the event was a highly competitive business he said, with host cities around the world negotiating differing terms.

Mr Westacott pointed out other major events, such as the Australian Open tennis, also cost taxpayers in the form of investment in permanent infrastructure.

The documents reveal Bernie Ecclestone offered to trim costs for the 2011 race, offering to slice $US5 million from the fee when the Brumby Government sought to renegotiate terms.

The Herald Sun understands the billionaire F1 boss also agreed to waive a $US1.3 million "transportation" or "fuel" levy on top of the franchise fee to cover the cost of flying plane-loads of equipment to Australia.

Approached for comment last night, Premier Ted Baillieu's spokesman Paul Price noted the current deal was signed by the former Brumby Government.

"The previous Labor Government negotiated the current contract and it contains a number of clauses such as an escalation clause which sees the amount of subsidy escalate each year," he said.

Mr Price would not speculate on future negotiations.

"The Government has previously said that when we commence negotiations on the future of the Grand Prix, its retention will be considered in terms of the event's capacity to reduce costs and to offer value for money, and we will not be speculating on those negotiations," he said.

Mr Ecclestone could not be contacted last night.

Former Premier Jeff Kennett said last night he believed Melbourne was paying less for the rights to the event than many other host cities.

He said he could not comment on how much the fees were at the time the original deal was signed.

"Over time, it has escalated, of course. That has happened under governments of both political persuasions. But compared to what we spend on the tennis or the desalination plant, for example, it is a very small sum of money," he said.

"Victorians have been getting it at such a good deal, it might cause him some embarrassment."

fiona.hudson@news.com.au

The fast life of Bernie Ecclestone