06/03/2008 00:00

Questions also remain over whether all the stadiums will be finished in time, after the first inspection by world soccer body Fifa found that a number were behind schedule: Cape Town's Green Point, Durban's Moses Mabhida and Nelson Mandela Bay.

The first major test for the stadiums will be the Confederation Cup of Southern Africa, scheduled to be played between 14 and 27 June next year. But concern about the stadiums, with the exception of Nelson Mandela Bay, appears to be dissipating. Contractors say the reason for the initial delays in building them lies with the Government-appointed consultants who drew up the tender specifications for the stadiums. However, that problem now seems to be under control.

"We aren't worried anymore that stadiums won't be completed on time. But there is concern over the auxiliary infrastructure," says SA Federation of Civil Engineering Contractors economist Pierre Blaauw.

Auxiliary infrastructure refers mainly to the transport plans related to the event. One of the official 2010 projects is the rapid transit bus system planned for the tournament's host cities. But other projects, though not tagged in Government's books as official World Cup events, are also crucial. Those include the Gautrain project and the Gauteng freeway improvement scheme. Both have been planned in such a way that essential aspects will be finished in time for 2010.

Estimates of the number of visitors that SA can expect vary. Grant Thornton estimates there will be 289 000 overseas visitors and 48 000 African visitors watching three to four matches each. Over and above that 337 000, a further 115 000 South African tourists are expected to watch two matches each. Other estimates put the number of overseas visitors lower, at around 200 000.

But even at the lower estimates you can envisage utter chaos if the transport plans don't materialise as envisaged. Blaauw says deadlines are "extremely tight" and - due to other non-World Cup related infrastructure spending - a "pressure cooker" situation is beginning to develop in SA's construction industry.

Industry insiders say the trouble with projects such as the rapid transport bus system is that delivery is in the hands of local authorities that don't have the capacity to handle such projects. They're loath to comment on the record for fear of losing out on contracts.

In Johannesburg, the Johannesburg Development Agency (JDA) is the local government's delivery agent for the rapid transport bus system. JDA senior development manager Nkosinathi Manzana says the biggest risk for the programme is the environmental impact approval required. "There are some capacity issues there. But otherwise everything else is spot-on."

The JDA will handle the roads and stations relating to the system, while the City of Johannesburg will see to the procurement of buses and the training of bus drivers.

Blaauw says the fact that the rapid transport system coincides with the Gauteng freeway improvement scheme, as well as the building of Eskom's power stations and the Gautrain, means there's massive pressure on capacity. Eskom is spending R343bn over the next five fiscal years, mainly on new power generating plants but also on transmission and distribution.

The tightness of deadlines is evident from the Gautrain programme. The completion of the project is divided into two phases - the first is scheduled for completion 45 months after the commencement of construction on 28 September 2006, which works out to June 2010. That's the same month as the start of the World Cup tournament.

The first phase of the Gautrain includes the section between OR Tambo International Airport and Sandton - inclusive of the stations at Marlboro and Rhodesfield. The second phase will take 54 months to complete after construction begins and is being built concurrently with the first phase.

Referring to the Gautrain schedule, spokeswoman Barbara Jensen says: "We were affected by load shedding - but not anymore - as well as by the rains of January and early February. However, there are areas where we're ahead of schedule - so it balances out somewhat. We're currently constructing at 43 sites."

Discussing the greatest difficulties encountered in the project, Jensen says the geology of Gauteng is a headache - from the hard rock in the Johannesburg region to the dolomites in the Centurion region. "That's then also the reason why we're using tunnel boring machine technology to tunnel for 3km from Rosebank to Johannesburg's Park Station."

Jensen says another problem is that construction is taking place in the most densely populated area of SA. There's a need to mitigate the construction impact through traffic accommodation, road diversions and the management of the environmental impact.

Deadlines for the Gauteng freeway improvement scheme are also tight. The SA National Roads Agency is the Government authority running the project. The plan is that, by 2010, around 185km of freeway upgrading will have been completed on sections of the N1, N3 and N12. An additional 65km of freeway will be upgraded by 2010, including the completion of the proposed PWV 14 between Johannesburg and OR Tambo International Airport.

The first phase of the rapid transit bus system in Johannesburg runs through to 2010. It covers 126km and as many as 150 stations. Initial construction is under way at Soccer City, on the Soweto Highway, and in Edith Cavell Street in the inner city.

Economic consultant Mike Schüssler says SA's biggest problem is that there's much talk but very little action. He points out Government has been talking about a major push in infrastructure spending for years. However, Government's share in overall fixed investment spending has fallen from about 40% in the Sixties to around 16% in this century so far.

"There are tight deadlines for public transport. Government is behind and will have to play catch-up. Even if it weren't for 2010 we don't have a choice. This is spending that's essential to the economy," Schüssler says.

There can be no doubt that, despite the rising costs (see box), the spending on transport infrastructure will be good for economic growth in both the short and long term.

But the spending on stadiums is another story. Research conducted by economist Heinrich Bohlmann (and published on the University of Pretoria's website) shows that a crucial issue when deciding on the benefits of the World Cup is the question of long-term sustainability of the stadiums.

He refers to the example of South Korea and Japan, which jointly staged the 2002 Soccer World Cup. After the event, the under-use of most of South Korean and Japanese state-of-the-art stadiums raised concerns regarding their financial sustainability. Due to the soccer market's emerging status in those countries, they were unable to use so many large stadiums on a regular basis so some had to be demolished.

In SA, stadiums won't be demolished. However, Government officials admit that the new stadiums will have to be subsidised to be viable. On the issue of sustainability, Treasury spokeswoman Thoraya Pandy says: "The six new stadiums (Soccer City, eThekwini, Nelson Mandela Bay, Green Point, Mbombela, Peter Mokaba) will be owned by their respective municipalities and operated and maintained by them. There exists opportunities for private sector involvement in the operation and management of the stadiums. The host city municipalities will explore those opportunities to ensure good revenue streams and maintenance of the infrastructure after the competition.

"The four stadiums that will be upgraded are either privately owned (Loftus Versfeld, Royal Bafokeng Stadium) or on long lease arrangements (Ellis Park, Mangaung) and are currently sustainable."

The short-term effects on growth of the World Cup will be to help gross domestic product to grow by 4,6% in 2010, up from 4,2% in 2009 and 4% this year. Those are growth rates projected in the Budget Review by Finance Minister Trevor Manuel. The review reports the growth rates will be achieved "partly in response to stimulus from the 2010 Fifa World Cup".

But for SA to achieve the full benefits of the event, spending on transport infrastructure will have to go as planned - otherwise SA might have a chaotic situation on its hands.