Cape Town stadium-for-a-buck bid fails
Cape Town -
A last-ditch attempt to sell Cape Town Stadium to the Western Province Rugby Union for R1 failed on Wednesday, as the city council voted in favour of setting up a municipal entity to manage the venue.
Andre Fourie of the Freedom Front Plus proposed that the council enter into discussions with the rugby union to sell it the stadium for R1 as an incentive for them to sell their Newlands facility.
“Then we can write off this loss and get rid of this albatross.”
The stadium, which cost the city R4.5 billion to build, has been running at a loss since Sail de France ended its contract with the city to manage the venue. In May last year, its revenue was only R92 million, while the operating costs were running at more than R400m.
But Green Point ward councillor Beverley Schafer said the city had to adopt the best model, which was to allow a municipal entity to manage the stadium with primary tenants. This means the city will control the majority shareholding and monitor service delivery of the independent organisation.
Only one other councillor supported Fourie’s recommendation. The city had asked a business analyst to investigate five different business models that would make the stadium more financially viable.
Schafer said the city had already had success with its municipal entity Covenco, the holding company for the Cape Town International Convention Centre (CTICC). “We have the expertise and the know-how.”
After much consultation and public participation it was decided a municipal entity for the stadium was the best option.
But Fourie said the stadium could not be compared to the CTICC because there had been a market for a convention centre.
Grant Pascoe, mayoral committee for tourism, events and marketing, said it would take about 18 months to establish the municipal entity. The city would also need a new environmental authorisation for the stadium and apply for new zoning rights that would allow for commercial activity. These processes would also take just under two years.