Is the World Cup worth it?

2010-05-14 00:00

ANDREW Jennings is crystal clear about Fifa: it is an unaccountable organisation based on institutionalised corruption that performs as the “battering ram of global capitalism”.

Indeed, he goes further, arguing that it behaves like a mafia with a dominant leader, a code of conduct based on the concept of family, the ruthless pursuit of profit and influence, and protection from people in high places. Its basic purpose is to maintain the power of a close-knit elite.

Fifa demands that governments should not influence sport, but requires huge amounts of public funding to stage its extravaganzas and itself behaves like an arrogant small state. As a self-serving network of influence and patronage, it plays on the vanity of governments and politicians and their desire for international television exposure. Everyone, it appears, kow-tows to Fifa — even strong countries blink first and forget their real national interest. It is this, among other factors, that accounts for Fifa’s history of bribery and corruption (including ticketing rackets) and its ongoing lack of financial and tendering transparency. Never shy to court disreputable regimes, Fifa has hijacked the people’s game in its own interests and those of multinational companies. The only certainty about the 2010 World Cup is that Fifa will make a vast profit — maybe as much as R30 billion.

The Match saga

Rob Rose documents the remarkable saga of Match, the “shadowy company” appointed by Fifa to market accommodation. Justifiably anxious to avoid exploitative pricing, it insisted on a cap on South African tariffs, then imposed a 30% premium of its own, something invisible to tourists. But unbelievably, it imposed a mark-up of three to 10 times on accommodation in the Kruger National Park, making an “unconscionable profit”. None of this will benefit South Africa; just Fifa’s tour operator. It was apparently appointed without going through a tender process. Part of Match has links to the family of Fifa president Sepp Blatter.

Will South Africa benefit?

Mega-events are notorious for their failure to stimulate ongoing development and it is doubtful if the 2010 World Cup will be any different. Event-led development is a myth sustained only by further events — if they can be found. The Scandinavians talk about the “democracy deficit” of mega-events and the very lack of transparency and accountability that haunts governance in South Africa. All being well, South Africa’s image will benefit, but this is a matter for the elite. Sober analysts, Citibank for instance, reckon that the South African public is carrying too great a proportion of the costs. The authors of this study point out that R30 billion has been spent on infrastructure specific to the World Cup. Is this, they ask, another arms deal scenario lacking credible cost-benefit analysis? The profit on ticket sales will be a mereR254 million, so the ongoing returns will have to be massive to justify the original capital expenditure.

Sam Sole sums up bluntly: “Whatever the true cost, what remains the real tragedy of 2010 is the displacement of huge quantities of scarce time, money, skills and energy for a project that amounts to little more than a month-long television show.” Some economists are quietly asking whether the World Cup will in fact damage the South African economy. Collette Shulz Herzenberg points out that the duty of government is to make decisions that are in the interests of all the people, and queries whether those of the poor have been taken seriously. Failure to take a realistic and rational long-term view is described by Karen Schoonbee and Stefaans Brümmer as an “abdication of sovereignty” to both Fifa and its local organising committee.

Have we built white elephants?

The answer is that this is a distinct possibility. The calabash structure at Soccer City, effectively South Africa’s national stadium, cost R3,4 billion. But it has been privatised amidst considerable secrecy and even the R128 million probably due from Fifa for tickets will go to the appointed management company. The metro retains obligations such as insurance. Rose suggests that the public has lost out.

Green Point and Moses Mabhida stadia in Cape Town and Durban are vanity projects; one demanded by Fifa, the other by local politicians. Cape Town ratepayers have had to contribute R1,2 billion (which was three times the original budget) to satisfy Blatter’s ego and will get back three percent of this in ticket revenue. The premium paid for three extra matches in Cape Town has in effect been R3,37 billion, the price of67 000 low-cost houses.

Moses Mabhida Stadium cost slightly less, but the iconic arch has come at a price in terms of money and good governance.

Both stadia face an uncertain future, needing anchor tenants to make them financially viable. Rugby (in spite of threats in Durban’s case) has indicated that it is not interested in moving and club football does not attract sufficiently large crowds often enough. Much the same applies to Port Elizabeth’s Nelson Mandela Bay Stadium, whose viability depends on the uncertain prospect of a new rugby Super 14 franchise. In all cases, the benefits are judged to be narrow and the costs large and widespread.

This report alludes to the demolition of stadia following the 2002 World Cup in Japan and South Korea because they were too expensive to maintain. Athens is littered with crumbling Olympic Games facilities.

Conflict of interest

Herzenberg points out that conflict of interest creates opportunity for questionable deals. She argues that a combination of a vast budget with multiple components and tight deadlines opens up space for bribery and corruption; noting that the construction industry is notorious for shady deals. Skyrocketing costs certainly suggested collusion at several stages of stadia construction and in the recent past, the Competition Commission has looked into the sector, particularly at the price of steel.

The World Cup has certainly tested South Africa’s fragile understanding of good governance and the fine line between public need and private interest.

Rose writes of “the murky world of government tenders”. He suggests a widespread cynical attitude that the World Cup comes but once, with frequent use of confidentiality clauses to hide malpractice.

Eddie Botha and Gcina Ntsaluba investigate the Eastern Cape Tourism Board advertising and branding contracts whose aberrant outcomes suggest irregularities. A suspected whistleblower was suspended.

On a practical note, it is suggested that the Municipal Financial Management Act needs amendment. At present, too much control of tendering processes rests with officials who are often party-political deployees.

The message left with the reader is straightforward: could the money invested in the World Cup have been better spent? It is a question that might well haunt South Africa for years ahead.

CHRISTOPHER MERRETT

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