Casino operator Gold Reef Resorts has offered to make up the projected R600-million shortfall in the required budget for Cape Town’s 2010 World Cup stadium in Green Point — in return for casino facilities in the stadium.
Cape Town council sources told the Mail & Guardian that the cost overrun on the 68 000-seat stadium at the Green Point Common was now projected at between R600-million and R650-million on the original R2,5-billion budget.
They confirmed that Gold Reef Resorts, which owns five casinos in four provinces, had offered to fork out the shortfall. The proposed trade-off was a casino and luxury accommodation on the top tier of the three-tier stadium once the World Cup is over.
If the deal goes through, Gold Reef would also manage the stadium and grounds surrounding it in the aftermath of the tournament.
Said a council official: ‘In effect, this means Gold Reef will be given the stadium after the World Cup.â€
The council’s technical director for the 2010 World Cup Team, Dave Hugo, confirmed that the city was in discussions with facility operators including Gold Reef Resorts. ‘The purpose of the discussions was to obtain information on models, options, successes and failures in the operation of facilities and no details were discussed. A request for proposals will be issued soon, inviting operators to run the Green Point stadium post-2010.â€
Neither Gold Reef Resorts CEO, Steven Joffe, nor Maxim Krok, chairperson of the Gold Reef board, could be contacted for comment. Both are on holiday.
The other two facility operators Cape Town has engaged with an eye to carrying the costs of the project, and managing the stadium after the World Cup, are understood to be the Western Province Rugby Union and Dubai World, which is part of the consortium which recently bought the V&A Waterfront for R7-billion.
Council documents show that R193-million of the original projected cost was to be borne by national government, with R400-million put up by the city and R112-million by the Western Cape government. But the bidders — Group Five Building, Murray & Roberts, WBHO, Steffanuti & Bressan Civils and the Portuguese construction firm Constructora do Tamega — returned with costings 30% above budget. Two firms said the stadium would cost more than R3-billion.
Tenders in Port Elizabeth and Durban — where stadiums are also being built to host World Cup matches — have also come in at up to 30% above the budgeted amount. If the Treasury does not bail out these municipalities, they will have to raise loans — repayable by ratepayers — or clinch deals with large commercial enterprises.
Durban has postponed the award of contracts because of the overrun.
Last year Cape Town’s mayor, Helen Zille, said construction on the Green Point Stadium could only begin in January if the national government guaranteed the bulk of the projected expenditure, adding that the city could not afford more than R400-million. ‘We cannot end up with a situation like in Montreal when the grandchildren of the people who made the decisions for the 1976 Olympics are still paying the bill,†Zille said.
Mayoral committee member Ian Neilson confirmed that the city was still discussing finances with the Treasury. ‘We’re also talking to other tenderers, but I can’t talk about this. We’re not sure whether Treasury will bail us out given the massive overrun. Getting the best price is critical for us — this is the biggest tender Cape Town has ever seen,†Neilson said.
The Green Point project has been dogged by problems since Fifa requested a stadium there. Neilson said contracts had to be awarded and construction initiated within a month, or the city would run into serious difficulties with finishing the project. Fifa has given the three cities until March this year to start building.
The Green Point Common Association, a ratepayers’ body, and Western Province Athletics have threatened to sue the city if it presses on with the stadium.
Fifa’s choice
A Western Cape government document has shed light on Fifa’s role in driving the Green Point Stadium project, which has become a headache for the Cape Metropolitan Council.
The initial plan was for an upgraded Newlands Rugby Stadium to host World Cup games, but after political intervention, it was decided to propose Athlone Stadium as the city’s preferred venue.
The city spent R322-million on upgrading Athlone, in the hope that Fifa would approve it for a World Cup quarter-final.
A senior government source, who asked not to be named, said that during their inspection in October 2005, Fifa delegates objected that the low-cost council housing around the Athlone stadium would not form a suitable backdrop. ‘A billion television viewers don’t want to see shacks and poverty on this scale,†one delegate allegedly said.
In a confidential document titled Draft Strategic Plan for the Provincial Government of the Western Cape and the City of Cape Town, Laureen Platzky, deputy director general in the Western Cape premier’s department, confirmed the chain of events.
Platzky wrote: ‘During this [2005] visit, the Fifa delegation indicated that they were not willing to consider Athlone — but that they were surprised that Green Point — (was not) the site for the semi-final — as it was the prime location to profile South Africa and the African continent through the world’s biggest football event.
‘In their view, neither the Athlone nor the Newlands stadia would be suitable for a semi-final.
‘The local organising committee indicated to the provincial and city leadership that should they want the honour and benefit from the not inconsiderable benefits of hosting a semi-final, which would attract well over a billion TV spectators as well as thousands of international fans and their families, not to mention all the lead-up events, product launches, possibly a Fifa congress and high-profile other events, they should consider expanding the Green Point Stadium.â€