Chiefs' R1-billion stadium crisis

Five years after its developers announced that the construction of the Kaizer Chiefs Stadium would be complete by this year, not a brick has been laid.

Construction work on the Bob van Reenen stadium precinct in Krugersdorp, earmarked by Chiefs as their home venue, was expected to begin in July 2006 and it was to be ready to use in 2008.

But no work has started since Mogale City, Chiefs, Lefika and the Gauteng provincial government entered into an agreement in 2003.

The blame for the delay has been laid at the door of property development company Lefika Emerging Equity, the executive director of which is Bobby Motaung, Chiefs’ general manager and the club chairperson’s son.

The company apparently failed to raise the R1,2-billion needed for the construction of the stadium.
It also allegedly failed to adhere to environmental assessment and heritage preservation regulations.

In January, Lefika was castigated in a Nelspruit municipality audit report in relation to a R1-billion tender irregularity for the Mbombela Stadium in Mpumalanga.

The Krugersdorp Stadium has been under lock and key since 2006 ahead of the intended construction work. Grass growing on its outskirts looms and the venue looks like a cattle pasture rather than a sports ground. The closure has robbed Krugersdorp’s school and amateur sports clubs of a recreational venue.

Chiefs, which at the time of the announcement said the venture would make the club the first to “own a stake in their own stadium”, has been strangely reticent, choosing to refer all enquiries to Lefika rather than to comment, casting doubt on whether the club is sticking to the plan or whether the stadium is solely a Lefika project.

Though the stadium’s sponsors, Lefika and Mogale City, announced in 2006 that the stadium would be ready by 2008, the club’s website appears to have extended the deadline by a year.

The Gauteng Economic Development Agency (Geda), which facilitated discussions between Lefika and Mogale City, conceded that the delay was worrying because it would lead to cost escalations.

Geda spokesperson Barba Gao-ganediwe said Geda’s involvement was “non-financial”, but confirmed that Lefika had approached the provincial government with a view to getting it to invest in the project.

Gaoganediwe said that as non-financial partner, Geda was not privy to the timeline for restarting the project but was concerned that the delay would affect expectations created by the announcement of the project, particularly because the Mogale City area had been hard hit by the closure of gold mines in recent years.

Sipho Solfafa, the 2010 World Cup project manager on the West Rand, said construction had been delayed because Lefika was experiencing financial problems.

“Even though Mogale City was not appointed a 2010 host, after the bid announcement the layout and design of the Amakhosi Stadium was changed to meet Fifa standards. The quotation then amounted to R1,2-billion and Lefika said it had secured R500-million from Nedbank for the initial design, which was expected to cost R700-million. But that was just talk, they showed nothing to prove that they had secured funds from Nedbank.”

He added: “Lefika then had a shortfall of about R700-million and it had to secure additional funding. We suspected that it was having financial problems when they [Lefika officials] came back to us and started talking about selling their shares for R1,2-billion—the value of the construction of the stadium. They had problems but they didn’t say anything. They are good at talking about the money they [say they] have but they can’t show it to us. What we want to see is what they have.”

Mogale City municipal officials were hoping the stadium would be completed in time to host some of the 31 sides taking part in the 2010 World Cup. “We still have hopes and think that it will be completed by December 2009,” said Solfafa.

Geda was also confident the deal would be rescued but officials were loath to propose a time frame. “Perhaps the timelines [set earlier] did not accommodate possible mishaps in a multimillion-rand project of this nature,” said Gaoganediwe. Geda would make its project management capacity available should this be required because “we believe in this project. It is much-needed and viable”.

Solfafa said government was seriously concerned. “Since government has pumped out money the land will no longer be leased only to Chiefs but to other teams as well if there is a need. Government has total control of the venue. We are putting Lefika to the test and if they don’t come to the party we will look for other potential investors and put the stadium construction on tender again.”

Chris Gribb, CEO of Lefika, denied that the delays were caused by finances. “I don’t know where you get that from. The delays were caused by the environmental impact assessment (EIA) and the heritage impact assessment (HIA), but things are coming right and construction should start very soon,” he said.

“I just don’t understand why it took so long for our application to be approved but everything is under control and we are meeting with our funding partners, whom I cannot mention.”

But Solfafa dismissed Gribb’s comments. “There is no way government can delay a process to approve an application for someone to build a shop if they have followed the right procedures, done the EIA and the HIA. Those are just minor issues which you need to comply with. These guys [Lefika] don’t have money.”

Additional reporting by Fikile-Ntsikelelo Moya

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