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Treasury gets jitters over soccer stadia

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Treasury gets jitters over soccer stadia

by Toyah Lord
12 Sep 2007
Peoples Post
Peoples Post

The National Treasury, for the second time running, has again expressed its concerns surrounding the sustainability of the 2010 Soccer World Cup Stadiums once the matches are over and the World Cup has passed.

These concerns, based on the sustainability of the facilities not becoming a burden for the ratepayers of Cape Town, were raised last week Friday during a parliamentary finance session.

Malcolm Simpson, the treasury deputy director-general in charge of the 2010 World Cup preparations, has been quoted in the media as saying that with hindsight South Africa should have considered the future viability of the stadiums before bidding, but said "this is (now) history".

This is the second time that the National Treasury has raised its concerns regarding the 2010 Soccer World Cup Stadiums since the minister put down the budget in February.

But, according to Simpson, concerns like what the stadium will be used for and how many days out of the year the infrastructure will be utilised are "normal".

"What needs to be done", says Simpson, "is that all parties involved in sports need to come together to decide on the best way forward in the utilisation of the stadiums to ensure that all operating costs are covered".

He goes on to say that the design of the most appropriate business model needs to formulated, which is standard, and remains a working progress.

Commenting on the concerns raised last week during Parliament, Pieter Cronjé, city spokesperson for 2010, says: "We have taken note of Simpson's comments, and the city is currently busy with a tender process to find an operator for the Green Point Stadium and the surrounding Green Point Common Urban Park redevelopment." He says the operator will be expected to run both facilities in a sustainable way, thereby ensuring these facilities do not become a burden to the ratepayers of Cape Town. And it is through this tender process that Cronjé believes the stadium will not affect ratepayers' pockets.

"Currently the city is evaluating the three tenders received and we hope to finalise the adjudication by the end of September, barring unforeseen hitches."

The decision was taken by the City of Cape Town to put out a tender process as the city did not want to operate the facility themselves.

"We regard it as a specialist task and require expertise in the running of the facility," says Cronjé. "Therefore we are seeking to appoint the best available operator in the field now already to ensure that it does not lead to ratepayers having to pay the price."

He adds that the city is "confident that, with an able operator, the stadium can be run in a sustainable and manageable way that will not affect ratepayers".

Arthur Wienburg, chairperson of the Cape Environmental Protection Association (CEPA), however, is not as convinced of this as the city is. "The council knows full well that if built, the Green Point Stadium will be a burden on ratepayers," Wienburg argues.

He bases this statement on an alleged announcement a week ago by one of the city's spokesperson that the annual maintenance cost of the stadium would be between three and five percent of any such facility.

"Given their average of 4%, this would mean that the council would have to set aside R120 million a year for the maintenance of the stadium," he claims, adding that this is before any return on capital employed is received.

"If a modest 8% return is expected, this would mean that the facility would have to produce a further R240 million a year. Thus the total income would have to be R360 million a year. I am willing to bet a Bar-One chocolate that no tender will come close to this. Therefore we know that this will be a costly white elephant - a drain on ratepayers - and lead to further rate increases which the public can ill afford and will impact negatively on the poor and take away resources which could and should otherwise be used for poverty alleviation."

He concludes that the only interested sports body seems to be the Western Province Rugby Football Union.

"So much for the council and FIFA building a legacy for soccer".

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