Cape Town - 110726 - The City of Cape Town, Brand and BES Mandla have come up with a way to save one million rand a year on the electricity costs of Cape Town Stadium by installing new lighting and a new schedule of lights that will be on at the stadium - Photo: Matthew Jordaan

Cape Town - The City of Cape Town has finally released the true costs of running the Cape Town Stadium - a whopping R436 million since construction.

As global megastars Bon Jovi rocked the 2010 World Cup Stadium on Tuesday night, and teen sensation Justin Bieber to follow on Wednesday, alarming figures have finally been made public.

On April 8, the Cape Argus published figures calculated by councillor Yagyah Adams, of the Cape Muslim Congress, who is on the finance portfolio committee, that the operating cost of the stadium from the end of 2009 until June this year was projected to be more than R300m.

Deputy mayor Ian Nielson’s office said the figures were incorrect.

At the time Kevin Jacoby, chief financial officer for the City of Cape Town, said the financial results for the various financial years were presented unclearly.

He would review the report and present it at the next finance portfolio committee meeting.

The new figures were presented on Monday. And instead of being less than the disputed figure of R300m, the new total is R436m.

On Tuesday, Adams and the Cape Argus submitted the following questions to Nielson, to which the acting mayoral committee member for finance, Brett Herron, replied last night:

Q: Have Cape Town ratepayers paid R436m since 2009/2010, in addition to the city’s contribution to the capital costs?

A: Yes.

Q: Was it known upfront that the city would be liable for such massive costs?

A: The City of Cape Town accepted the responsibility of World Cup and all its related obligations. Since the Cape Town Stadium is a strategic asset, the city has provided for costs. We however intend to minimise, as much as possible, the impact on the ratepayer.

This is why we undertook a feasibility study which is currently open for public comment on how to ensure our asset raises revenue in response to the capital investment. All inputs are appreciated.

Q: Why were there such high expenses at inception, as “general expenses” and “contracted services” and “consultant fees”? A total of around R238m was spent in the 2009/2010 financial year. What was this spent on? Were these more like “set-up costs”, or actual “running costs”?

A: We have to analyse (specific costs)… with more time. Significant operating cost were required for what turned out to be a very successful World Cup. Residents can be assured that we went through our normal, prudent procedures, taking into account our obligation to the event and the costs to the ratepayer.

Q: Over the full period, what were R50m in “employee-related costs” spent on?

A: The Cape Town Stadium is a strategic asset that belongs to all residents of the city. As such, we are obliged to care for it and ensure that it doesn’t fall into disrepair. This requires a high level of care from staff. Employee-related costs reflect this.

Q: What were almost R40m in “consultant fees” spent on?

A: More time is needed to respond.

Q: The operating surplus/loss for 2012/2013 is almost R48m, but includes R26m for “depreciation”. While this may be correct accounting procedure, is the annual actual “expense” therefore more like R22m for this year?

A: The Finance report to the portfolio committee was transparent and included all costs including depreciation, or a measure as to how the asset is consumed. Any Finance report that excludes depreciation would be an incomplete report. You may however categorise the costs and analyse separately.

Cape Argus