/ 11 December 2009

Jo’burg’s Miss World debacle

The 2009 Miss World pageant will cost the City of Johannesburg at least R90-million — double the R45-million the city has publicised. One of 112 contestants will be crowned Miss World on Saturday night at the Gallagher Convention Centre in Midrand.

The Mail & Guardian is in possession of an agreement signed by ­Graham Cooke of World Awards Limited and Lindiwe Mahlangu-Kwele, when she was still Mahlangu, the chief executive officer of Johannesburg Tourism Company (JTC), in October 2008.

In terms of the contract JTC agrees to pay a hosting fee of £6-million (about R73-million at the current exchange rate). The JTC will foot the bill for a host of logistical, travel and accommodation arrangements that will send the total soaring to at least R90-million.

The bill ultimately rests with the cash-strapped City of Johannesburg, because JTC is a section 21 company funded by the city.

The city has already cut its budget by more than 4% — R1,1-billion — sparking concerns that it will not be able to deliver essential services. The M&G understands that JTC is insolvent and was granted a loan of R13-million by the city last month.

Mahlangu-Kwele told the M&G that the mayoral council decided on November 6 last year to host the pageant. She denied that JTC was insolvent. She confirmed that the city’s contracted costs include £6-million for the hosting rights and a R17,3-million project budget. She maintained that the latter would be partly offset by sponsorships ‘in cash and in kind” to the value of R10,5-million.

Ticket sales would also help JTC offset costs, she said.

She did not indicate who the sponsors were or how much was to be recouped in cash or in kind.

Cooke told the M&G that the document in the paper’s possession was an ‘unexecuted draft” and that the final document included a third signatory — Miss World. But he confirmed the terms of the contract were the same in both documents. According to the contract, the JTC will pay for a host of other expenses, including:

  • All the staging facilities, reception for contestants, security, permits and visas to a standard stipulated by World Awards Ltd;
  • All food and accommodation of four- or five-star quality for the month-long event. This includes soft drinks and mineral water for the contestants, Miss World working team, Miss World guests and TV crew. The accommodation includes 65 twin rooms for contestants, 20 twin rooms and two suites for translators and administrative staff, eight twin rooms and two suites for executive personnel and one presidential suite for Miss World boss Julia Morley;
  • All transport, including internal flights, a television broadcast truck, coaches, luggage trucks and a number of luxury vehicles;
  • Hair and make-up artists; and
  • Hosting the winners of the 2009 Miss World and the Seven Continents pageant; as well as beauty queens representing the countries of the 32 Fifa World Cup qualifying teams in Johannesburg from June 9 to July 14 next year. Here JTC is to cover the costs of all airfares, match tickets, internal transport, hotels, food and ­beverages.

Mahlangu-Kwele said the rights fee covers the cost of this last obligation.

Cooke told the M&G ‘the Hyatt in Johannesburg is the official hotel partner as awarded from a JTC tender”. Other hotels included the Radisson in Port Elizabeth, Zimbali Lodge in KwaZulu-Natal, Legends Golf & Safari Resort, Sun City and Spier.

Don Forbes, Democratic Alliance spokesperson for finance in the city, said the cost of hosting the pageant amounted to wasteful expenditure.

‘The city has already had to cut its budget by R1,1-billion and service delivery will collapse. [The pageant] does not contribute anything to the city’s ability to meet its mandate and comes at a time when its finances are questionable.”

Last year’s Miss World pageant in Johannesburg also ran into trouble when a number of sponsors allegedly reneged on their agreements and the city had to spend R40-million that was not budgeted.

City documents outlining adjustments to the operating budget for the 2008-09 financial year show that the economic development department applied for an increase of R10-million ‘due to additional funds that were transferred by various departments to cater for Miss World Beauty Pageant”. And the tourism department requested an additional R30-million ‘to cover for the Miss World Beauty Pageant”.

But Mahlangu-Kwele told the M&G that JTC recorded a deficit of only R12,5-million for last year’s event.

Virgil James, spokes­person for the city, said the city had nothing to add to Mahlangu-Kwele’s comments.

  • On Thursday credit rating agency Moody’s downgraded the City of Johannesburg’s long-term rating. The ‘action reflects the impact of the deteriorating liquidity position of Johannesburg and its already high level of gearing”, it said in
    a release.

    ‘The liquidity pressures were caused by the current credit crisis and economic recession, coupled with the massive spending on infrastructure over the last couple of years.”

    A symbiotic relationship
    World Awards managing director Graham Cooke is the president and founder of the World Travel Awards and said it was at the 2008 World Travel Awards that he met Lindiwe Mahlangu-Kwele, chief executive of the Johannesburg Tourism Company (JTC).

    In May this year Mahlangu-Kwele was named Africa’s tourism personality of the year, at the 2009 World Travel Awards held in Durban, according to the City of Joburg’s website. The JTC was named Africa’s leading city tourist board.

    Mahlangu-Kwele recently married Peter Kwele, head of Project 2010 for the SABC, at the luxurious Zimbali Lodge in KwaZulu-Natal. The nuptials were featured on lifestyle programme Top Billing and Cooke attended as a guest.

    Mahlangu-Kwele rejected any insinuation that their relationship helped smooth the way for the JTC to co-host the Miss World Pageant. ‘Mr Cooke was a guest at my wedding, with a number of other high-profile tourism personalities,” she said.

  • Miss World Limited declined to clarify its relationship to Cook, but he appears to acting as the company’s agent.

    An earlier version of this article said Cook owned Miss World Limited. Miss World Limited tells us this is not the case. The error is regretted.


    M&G Slow