Cape Town Stadium: icon or albatross
Cape Town - An albatross around the necks of ratepayers, or a valuable and iconic asset? The Cape Town Stadium, running at an annual loss of about R40 million, was described as both during Tuesday’s full council meeting where it was agreed that the current management plan should be extended by a year to June 2016.
Councillors alluded to the recent Fifa corruption scandal during their debate on the stadium’s future, with Andre Fourie of the Freedom Front Plus saying that Fifa president Sepp Blatter took billions of rands out of the country, leaving Cape Town and other municipalities with massive bills for the stadiums that were built.
He said the consortium of Stade de France and the local SAIL Group pulled out if its management agreement with the city soon after the World Cup when it realised the stadium would never be filled to capacity.
Fourie said it was unlikely that the formation of a municipal entity to manage the stadium would be the panacea the city needed to make the facility financially viable.
“This albatross - despite the thousands that it cost the city to build - is costing ratepayers in unaffordable monthly operational and maintenance costs.”
Fourie said the only way the city could avoid any further financial loss was by selling the stadium to SA Rugby for R1.
“Acknowledge that the stadium was a mistake. Accept that you are not going to make it commercially viable without an anchor tenant. Cut your losses - and the albatross around the neck of Cape Town’s ratepayers - and offer the stadium to Newlands for R1.”
Demetrius Qually, of the DA, said that although the Fifa scandal had tarnished the World Cup legacy, the stadium remained a valuable and iconic asset.
There was also “justifiable” concern about the long-term viability of the stadium. However, the business plan being finalised, which included the lifting of restrictive environmental conditions, would make it sustainable.
“We are confident that the stadium and Green Point Urban Park can be both viable and financially sustainable,” said Qually.
Grant Haskin, of the African Christian Democratic Party, agreed that the management of the stadium had to continue without interruption while the business plan was being finalised.
But he said the city had been promising “stadium profitability” since 2009. “How then can one blame irate ratepayers for their calls to rather demolish the stadium instead of wasting their money? What was a proud moment in Cape Town’s history has become a furious embarrassment for the city and its people.”
Majidie Abrahams, of the ANC, argued that extension of the management arrangements without clarity on the business plan could put the city at risk of spending and losing money for another three years.
But mayor Patricia de Lille pointed out that the management plan had been extended to June 2016, and not 2018 as initially proposed, and included a condition that a progress report on the commercialisation of the precinct would be submitted to council in March next year.
Garreth Bloor, mayoral committee member for economic development, tourism and events, said the rezoning process was already under way. Demolition of the stadium was not an option, he said.
The city had been advised of 18 revenue streams that would generate a profit for the next 10 to 15 years.
This excluded any revenue that would come in from an anchor tenant.
He said the naming rights alone would secure between R5m and R10m in revenue for the city. The tabled revenue budget for the next financial year is R14m.
But Bloor allayed fears about the discrepancy between the stadium’s projected costs and income.
Although the tabled operating budget expenditure for 2015/2016 was R138m, limited commercial rights would bring this amount down to R34.2m. “The commercial rights process has already started. We will make it work and we will continue the (World Cup) legacy,” he said.