By Lindsay Dentlinger
Cape Town's preparations for hosting the 2010 Fifa World Cup are running almost R2-billion over budget and the city now seems set on a collision course with Fifa.
When the city's 2010 team asked the council's budget committee for an additional R450-million on Friday, "shocked" committee chairperson Ian Neilson sent the team back to the drawing board to reduce their request to R300-million.
He said: "We are starting to run into difficulty now. We must adopt a tough stance. Fifa can't be bullies, telling us what to do. The city can't afford the extra costs that are being squeezed out of us.
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| 'The needs of this city go far beyond 2010' |
"The needs of this city go far beyond 2010."
The latest revised cost of hosting the event in Cape Town is estimated to be R5,8-billion.
With the Green Point stadium now 55 percent complete, its price tag has increased to R4,5-billion from an original cost of about R3-billion. The latest over-run includes a shortfall of R658-million needed to complete the stadium.
The City of Cape Town has come up short on the budgets for developing the stadium precinct, the urban park and the reconfiguration of Green Point Common.
Head of the city's 2010 team Mike Marsden was given a flat no when he made the request for more money on the city's operational budget for 2009/10.
Besides the shortfall on the stadium, the city's 2010 team says over the next three budget years, it needs at least R655-million for capital expenditure and another R624-million for operating requirements related to World Cup preparations.
Neilson said Fifa could not continue to make demands on the city which it could not afford.
Neilson was incensed that the city would be expected to fork out about R1-million to pay for tickets for the city's mayoral committee and the mayor's guests.
The ANC's Peter Gabriel agreed: "It seems Fifa thinks we have a bottomless pit of money."
Marsden said the revised budget had been informed by ongoing negotiations between the city and the preferred bidder to operate the stadium - a consortium of sports marketing company SAIL and Stade de France - and it could still fluctuate.
"The final estimated cost of completing the stadium still entails risk," said Marsden.
"Cost uncertainty and cost escalation with respect to the 2010 Fifa World Cup have placed the city in a difficult situation. We need to continue engagement with National Treasury and other funding partners to acquire capital and operating funds."
The city is proposing a pro rata shareholding in the stadium, based on the financial contribution made, to meet the funding gap.
This would make the national government the majority shareholder with 51,3 percent, while the city would hold 33,7 percent. The provincial government, the Development Bank of South Africa and other funders would hold between 4 percent and 5 percent.
The city is R25-million short on its budget for constructing the stadium precinct, which will cost R53-million. The urban park, at a cost of R138-million, is also R20-million short on budget.
The city has failed to budget R15,2-million for bulk water and access roads for the reconfiguration of the common, which will cost R100-million.
The cost of road works has escalated by R136-million and R162-million is needed for the hiring of transportation. The city would also have to make provision for public-liability insurance of about R250-million.
Fifa requirements for which the city has not budgeted amount to R27-million and include expenses related to the final draw, safety and security for private people, accommodation for the local organising committee and city beautification.
At Fifa's request, the city would also have to pay R15m more to have the temporary seating installed by April 2009, rather than in October as planned.
Neilson said the city could not be expected to foot the bill. Marsden said Fifa required the seats to be in place for ticketing purposes.
Marsden stressed not all the additional funding requested was to meet Fifa stipulations.
Non-Fifa requirements included a volunteer programme at a cost of R13m, which would help the city improve operational efficiency and create temporary jobs.
But even the preferred operator is adding to the city's budget woes, requesting that the stadium be fitted with a disaster-management control room at an estimated cost of R5-million, a pitch-protection system to allow for concerts to be staged on the field at a cost of R7,6-million, and two replay screens at a cost of R12-million.
- This article was originally published on page 1 of Saturday Argus on November 08, 2008
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