|
EC 2010 stadium in cash crisis
25/06/2007 08:45 - (SA)
Johannesburg - The Nelson Mandela Bay municipality has decided to downgrade the city's 2010 Soccer World Cup stadium because the Eastern Cape government has not paid the R212m it previously committed to the project, the Herald Online reported on Monday.
However, the government said it remained committed to the development and would release the funds if the municipality could explain why the budget had shot to more than R1.2bn.
Provincial government spokesperson Phapama Mfenyana said the municipality did not have the authority to make changes to the original design, as the stadium also belonged to provincial government.
"Our contribution is not in question, but Bhisho first wants the municipality to provide a detailed breakdown of what has caused the budget to overshoot to R1.2bn."
It was initially estimated that the Port Elizabeth stadium would cost R250m, but the figure increased to R711m in 2006, and finally to R1.2bn.
This left the municipality with a shortfall of R262m, with the national treasury saying it would not allocate more funds.
Municipal manager Graham Richards said 2010 executive director Errol Heynes had expressed concern at the lack of response by Bhisho to the municipality's request for a guarantee on the provincial government's contribution to the shortfall.
"The matter has become quite urgent and therefore instruction has been given to the technical team to reduce certain areas within the stadium to incur further savings until other sources of revenue are secured," said Richards.
He said the cutbacks would reduce the sustainability of the stadium, but that it would remain Fifa compliant.
The municipality has indicated that one of the elements of the stadium which could be done away with was the roof.
Richards has in the past said that some of the reasons for the increase in the construction budget were increases in the cost of equipment, the high level of construction activity, possible shortages of building materials, possible shortage of skilled labour and the nature of the project, which is considered high risk.
- SAPA
|
