Hosting the 2010 FIFA World Cup and constructing the new Green Point stadium will not affect basic services and will benefit Cape Town in the long term, according to Executive Mayor Helen Zille.
“It is simply wrong to claim, as some commentators have, that basic services will be curtailed in order to finance the stadium,” she said.
Addressing Council on Wednesday, 3 December 2008, Zille pointed out that the funds the City of Cape Town receives from service charges are specifically used for maintaining services, and are not related to stadium costs.
She added that the increased charges over the past two years will fund new sub-stations, sewerage plants, water pipes and other critically needed services and infrastructure. Eskom electricity prices will also rise approximately 33%.
“The City has made it clear that it will also limit the impact of the stadium on rates. Our officials are currently in talks with National Treasury over the remaining funding gap of around R550-million on the project, and we are also looking at other sources of funding, which include selling the naming rights, ticket sales and income from the operating contract.”
Zille said stadium cost overruns are a national problem, due to factors such as an overheated construction industry, rising material costs and inadequate budget parameters for escalation and contingencies set by National Treasury.
Sports Minister Makhenkesi Stofile recently revealed that budget overruns at the 10 stadiums being built or upgraded for 2010 have risen to R3.2-billion.
Zille also pointed out that Cape Town is receiving huge national government investments for its relatively small contribution to the new stadium and operating costs.
“In return for putting in around R1-billion of City money for the stadium, operating costs and public transport, ratepayers of Cape Town will benefit from a R2-billion upgrade to the airport, a R1.3-billion Bus Rapid Transit system, over R1-billion worth of upgrades to major roads, around R1-billion in upgrades to electricity generation infrastructure, a R400-million upgrade to the central station, R1.2-billion for new trains, and hundreds of millions of rands worth of upgrades to public spaces and facilities.”
These will all benefit residents after the event, as will the extra tourism, investment and jobs created as a result of the marketing from hosting it.
“If we had not agreed to build the stadium, most of these investments from national government would instead have been focused in Johannesburg and other cities.
That would have been a tragic missed opportunity for Cape Town,” Zille said.
Zille also gave a progress report on preparations for 2010, saying that 45% of construction on the stadium had been completed by the end of the first quarter of the City’s financial year. All concrete work has been completed, and almost all of the 72 compression beams for the roof have been placed.
Apart from the stadium, 55% of detailed transport plans for 2010 have been executed, as has 30% of the event operating plans, and nearly 28% of the other planning work required for 2010.
The City has fallen behind on only two work streams – the installation of electricity infrastructure as a result of imported switchgear being damaged during shipping; and the reconfiguration of Green Point Common due to delays in finalising the Record of Decision for the new design.
Martin Pollack
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