National

Cape Town bullied by Blatter, Mbeki

Stefaans Brümmer 30 Apr 2010 06:00

Fifa president Sepp Blatter and former president Thabo Mbeki intervened to have a new 2010 stadium built in Cape Town —a likely white elephant that was R3-billion more expensive than the two alternatives.

Green Point stadium, now renamed Cape Town stadium, cost R4,5-billion to build, compared with an estimated R1,1-billion to revamp the Newlands stadium or R1,7-billion to extend the Athlone stadium, according to Player and Referee: Conflicting Interests and the 2010 Fifa World Cup, published by the Institute of Security Studies this week.

In South Africa’s 2010 bid document Newlands was proposed as the Cape Town match venue, which Fifa initially accepted. Athlone, on the economically depressed Cape Flats, was the choice of city and provincial officials, as they believed it would have the most developmental impact.

But Green Point won, because it was in the interests of Fifa and the local organising committee to have access to “state-of-the-art stadiums in the ‘best’ locations to draw the maximum number of visitors and viewers”.

Fifa makes most of its revenue from the sale of television rights. The organising committee, Fifa’s local implementing agent, derives its revenue largely from ticket sales.

The Cape Town chapter of the institute’s study reveals that:

Ebrahim Rasool, then premier of the Western Cape, who formally preferred Athlone, met Blatter in November 2005.
Blatter argued for a new stadium at Green Point, suggesting it would earn Cape Town the right to host one of the two semifinals.

Mbeki met Blatter later the same day. After that the presidency contacted Rasool to motivate for Green Point.

A decision to go with Green Point rather than Newlands or Athlone was taken two months later at a Union Buildings meeting, ostensibly by members of the national government executive. But each minister present also served on the organising committee, which answers to Fifa.

Cape Town mayor Nomaindia Mfeketo subsequently switched the city’s formal preference from Athlone to Green Point without referring to her mayoral committee or council. She and her city manager could do so only because the council had been dissolved to prepare for the March 2006 elections.

In the final days of Mfeketo’s administration the city formally offered Green Point to Fifa. Blatter signed the acceptance, formally binding Cape Town to it, on March 15 2006, a day before the Fifa executive was to consider the offer. A possible explanation for Blatter’s haste: the Democratic Alliance’s Helen Zille replaced Mfeketo as mayor on the same day, March 15.

Zille publicly complained that the decision in favour of Green Point was taken without “costings and sums — I really think that we’re going into Green Point because Sepp Blatter says: ‘I like Green Point’, not because it’s the best thing for South Africans.”

In studies Zille commissioned on different stadium options Green Point was rated the most expensive and socioeconomically least desirable, but the only option which would earn Cape Town a semifinal.

She folded, reportedly saying: “Whether a threat or not, the provincial and national governments have said that we must host a semifinal or we lose 2010 [altogether].”

Green Point will host eight World Cup matches, including the promised semifinal. Athlone or Newlands would have hosted five to seven matches. This, the institute’s study says, brings the cost of one to three matches to about R3-billion, the amount Green Point has cost over revamping Athlone or Newlands.

The investment might have been worth it if Green Point Stadium left a lasting positive legacy. But city and provincial studies have highlighted the stadium’s questionable viability. Unless the Western Province Rugby Football Union moves its matches there, the new stadium will run at a loss.

But the rugby union does not want to, as it owns Newlands, which would be left redundant.

Partly to shield against losses, the city has appointed a private operator, SAIL Stadefrance, to manage Green Point on its behalf. On the face of it the city will get a third of revenue, but not be liable for losses. But the small print shows that the city will pay all structural maintenance costs, plus operational maintenance costs of more than R5-million a year.

The institute’s study quotes a city official as conceding that structural maintenance costs remain unbudgeted for and could have a major impact on rates.

And it quotes former provincial sport and recreation head Rod Solomons saying: “Let me make a prediction — That thing is going to be a white elephant because Newlands rugby is not going to move there and soccer unfortunately is never going to attract games where that stadium is going to be full.”

The study also reveals that:

South Africa’s 2010 bid book, kept under wraps, claimed it would cost $406-million (about R3-billion at the time) to host the World Cup, including $156-million (R1,2-billion) for stadium and related infrastructural upgrades. By now, the government has spent more than R17-billion on building and upgrading stadiums alone. Fifa, by comparison, stands to make record proceeds from this World Cup—at least $3,2-billion.

The organising committee pays local authorities 10% of ticket revenue to “rent” their stadiums. In Cape Town this is estimated at about R37-million—a third of a flat fee of R111-million that the city is paying SAIL Stadefrance to run the stadium before and during the World Cup.

The committee and Fifa do not contribute to the cost of stadium construction.

For Cape Town the total R4,5-billion cost is made up of R200-million-plus from the province, R1,2-billion from the city, and more than R3-billion from the national government.

Find the full report at the ISS Corruption & Governance Programme website www.ipocafrica.org or the Cape Town chapter at www.amabhungane.co.za

Stefaans Brümmer

Stefaans is an old hand at investigations. A politics and journalism graduate, he cut his reporting teeth at the Cape Argus in the tumultuous early 1990s; then joined the Mail & Guardian as democracy dawned in April 1994. For the next 16 years (a late-1990s diversion into television and freelancing apart), the M&G was his journalistic home and launch pad for award-winning investigations focusing on the nexus between politics and money. Stefaans has co-authored exposés including Oilgate, the Selebi affair, Chancellor House and significant breaks in the arms deal scandal. Stefaans and Sam Sole co-founded amaBhungane in 2010. He divides his time between the demands of media bureaucracy (which he detests), coaching members of the amaBhungane team, and his first love, digging for dung. Read more from Stefaans Brümmer

@StefaansB

National

Cape Town bullied by Blatter, Mbeki

Client Media Releases