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TSHWANE mayor Kgo-sientso Ramokgopa has defended the municipality’s decision to spend millions of rand hosting an annual golf tournament in the city, starting in February.
Tshwane ratepayers will foot the R132 million bill to host the inaugural Tshwane Open.
But analysts have warned it may be fruitless and wasteful expenditure if not properly managed.
Tshwane has entered into a three-year contract for the tournament. This means the city will be paying R44 million every year for the next three years to host the PGA-sanctioned event. It forms part of the Sunshine Tour, a series of golf tournaments staged by the Southern African PGA Tour.
Speaking at the launch of the Tshwane Open yesterday, Ramokgopa said the annual R44m fee was a “little contribution” if viewed against the city’s overall expenditure on more urgent priorities such as housing, poverty alleviation and roads infrastructure.
This included the R2.5 billion committed to eradicating shacks around the city over the next four years and R35m to upgrade roads in Soshanguve.
“This is not just golf. It is part of the bigger objective to market the city globally and to project ourselves as a leading African capital.
“We have made guarantees of the R44 million every year. But for us the bigger picture is what we can get from promoting the city globally and to international audiences.”
Ramokgopa said television coverage of the event would give Tshwane global exposure worth nearly R1bn.
Despite the emphasis on the potential to attract investment and tourism as major drivers behind the initiative, closer scrutiny of the memorandum of understanding (MoU) between the parties reveals an expensive exercise with no financial guarantees for the municipality.
However, all Sunshine Tour’s costs are guaranteed, with more than R26m to be paid over by the city by the end of this year. The same will be done for the next two years.
These costs include R16.5m prize money, about R3m for a TV broadcast package and more than R3m for Sunshine Tour’s sanctioning fees and operational costs.
The city will also pay nearly R4m in management and commercial rights fees to Sunshine Tour.
These expenses exclude separate costs to be carried by the municipality to host the tournament, including marketing and branding costs that amount to more than R16m.
The R16m direct costs for the city include R3m to host VIPs.
The head of the Unisa’s political sciences department, Professor Dirk Kotze, said such projects could be beneficial in the long term if properly and effectively managed.
They could help to attract tourism to the city and could yield more profits for the city if commercial sponsors were secured.
But if the city failed to yield more than it had spent, such expenditure would be hard to justify.
“Usually a municipality would play more of a supporting role in hosting such a tournament. We need to ask whether this is part of what they should be doing.
“Tshwane has been facing financial problems and has also failed to obtain a clean audit according to the latest auditor-general’s report.
“One would think they should probably be looking at consolidating their finances before embarking on such an expenditure,” said Kotze.
Roland Henwood, of the University of Pretoria’s department of political sciences, said it was important to market the city to attract investment and tourism, but there had to be clear benefits for residents.
“We need to know what will be the benefit for those paying rates” and those needing basic services.
“If there is money for VIPs there must be transparency on who they are, what kind of treatment they will be getting and what the benefits for doing that will be.
“The finance minister has been cautioning about such expenses which often turn out to be fruitless expenditure,” said Henwood.
Such expenses had to be weighed against providing services and properly managing the city. “We must not just shoot everything down, but must also ask serious questions about how public officials spend money and what the benefits for the people are.”