City considering charging R100 a year for 50-year lease of Cape Town Stadium
The City said it intends to enter into a lease agreement with the newly- created municipal entity responsible for the operation and management of the Cape Town Stadium Precinct.
The lease agreement falls within the definition of “right to use, control or manage” a capital asset.
The City will still be responsible for major capital infrastructure maintenance and upgrades.
The municipal entity is set to be responsible for the day-to-day operational costs and maintenance. But there will be no transfer of ownership.
The proposed lease duration is for 50 years, with an option to renew it for a further 49 years. This is to bring it in line with the service-delivery agreement already entered into between the City and the municipal entity.
According to the City, the rental will be R100 per year, with a rent review every three years.
But a report on the status of the performances of municipal entities said the stadium had only hosted four out of six events. According to the report Cape Town Stadium delivered four events against the service delivery and budget implementation target of six events.
It stated that Cape Town Stadium had not been in a position to host three soccer fixtures due to routine pitch maintenance; and due to the pitch rehabilitation not progressing as planned, the stadium could not host three soccer events.
The report goes on to state that it would be difficult to remedy the situation. “Global Economic Conditions that impact on our bowl events (concerts) are difficult to remedy. Every effort will be made to attract more such events to make up for the loss of concerts,” the report stated.
Lesley de Reuck, chief executive of Cape Town Stadium, maintained that the stadium did not make a loss. “To say that the Cape Town Stadium made a loss would be incorrect. The targets provided are quarterly forecasts, with the view to achieving the overall annual target.
“In this instance, the Cape Town Stadium was not in a position to host three soccer matches as a result of scheduled pitch maintenance,” he said. De Reuck said the pitch had to undergo scheduled maintenance based on a three-year cycle.@MarvinCharles17