By Henri du Plessis and John Yeld
The government has committed itself to spending about R242-billion to prepare for the Fifa soccer World Cup in 2010 - over half of the country's annual budget.
But all the money is going into the development of infrastructure that will remain for future use, said Vuyisa Qunta, spokesperson for the ministry of sport and recreation's 2010 World Cup office.
The figure was first confirmed by Butana Khompela, chairman of the national assembly's portfolio committee on sport, in a news report on Wednesday.
| Appeal for proper financial models |
But it caused alarm when Khompela called it a figure guaranteed to Fifa by the government to cover shortfalls in preparations.
Cape Town Mayor Helen Zille further emphasised her appeal for proper financial models of the expenditure on World Cup preparations, when she first heard the figure.
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Zille is to meet representatives of Fifa's local organising committee and the provincial administration today to discuss the financing of the new stadium.
"Statistics quoted by the ANC in (Wednesday's) newspapers show just how important it is for us to understand the financing of the World Cup before we sign contracts worth millions of rands," Zille said.
"Butana Khompela, chairperson of parliament's portfolio committee on sport, has said the government has pledged R242-billion for the World Cup.
| 'An extraordinary amount of money' |
"This is an extraordinary amount of money, and we need to understand whether this statistic is accurate, and what this money will be used for.
"We obviously want the World Cup to go ahead. The only question is how do we meet the requirements affordably?"
Referring to her decision to put the process for the new stadium in Cape Town on ice this week, Zille said she had "merely asked for a moratorium of one week on the signing of new contracts, so that we can understand the financial modelling of the project".
"There have been wildly speculative and contradictory estimates of costs involved," she said.
"We need to take decisions on accurate figures. The planning phase is going ahead.
"But we need to understand the feasibility and viability at the outset, not when we realise at a later stage that our models are faulty.
"That will put us in far greater danger."
Longer term projects such as transport improvements, upgrades of road networks and communication infrastructure that would have had to be done in any case would be where the money was to be spent, Qunta said.
The amount was calculated according to the budgetary provisions already made by government departments involved.
The only difference was that the projects would be fast-tracked to be completed in time for the Confederations Cup tournament in 2009. The Confederations Cup is held in the World Cup host country as a dress rehearsal for the main event in 2010.
By that time, the football stadiums to be used for the World Cup would have to be completed and used, including Cape Town's proposed new stadium at Green Point.
Qunta denied that the host nation had to put up any cash guarantees to the international soccer governing body Fifa.
"The government, as a partner to the South African Football Association, had to provide 17 guarantees to Fifa," Qunta said.
The guarantees included special dispensations such as tax breaks for the organisation's global commercial partners.
Qunta said Fifa did not need financial guarantees from host nations, as the event was sufficiently profitable for them.
"The television rights alone of the event in Germany this year will bring them $2,8-billion (R17,5-billion) and it is expected that this figure would grow to $3,5-billion in 2010.
"Then they still have the six global sponsors they have already been able to recruit for the 2010 event."
Laurine Platzky, acting head of the provincial Department of Sport and Cultural Affairs and a member of the city's bid evaluation team, said during a presentation at the Cape Regional Chamber of Business yesterday that even before Cape Town had been selected as a semifinal venue, the government had committed R3-billion in funding for new stadiums. And a sum of R3,6-billion had been committed to upgrade transport infrastructure.
She confirmed that she had met National Treasury officials on Wednesday to discuss the financial aspects of the bid.
Platzky said their initial estimate of R1,2-billion for the 68 000-seater Green Point stadium, and another R80-million for a fully retractable roof, had been based on the costs of similar new stadiums built around the world.
An initial stadium business plan, devised by the winning professional team in the planning and design bid process, would go to the Treasury by the end of June for adjudication in July.
- This article was originally published on page 4 of Cape Argus on March 30, 2006
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