2010: SA R2bn over budget

2008-08-13 14:41
Cape Town - The budget overruns for South Africa's ten 2010 Soccer World Cup stadia will be north of R2bn, says deputy Finance Minister Jabu Moleketi.

He added that with the benefit of hindsight, South Africa would do things very differently when it came to managing the costs for an event like this.

"If we had just met the minimum Fifa requirements, we would be talking a very different story," said Moleketi referring to the complex designs host cities chose for their stadia as well as the inadequate costing done by host cities.

The anticipated overrun is over and above the additional money allocated to the projects in February this year by Finance Minister Trevor Manuel. So far, R6bn has been spent on the stadia, which includes R700m in professional services like architects and project managers.

Overruns are obviously caused by the dramatic escalation of input costs in recent months but Moleketi says that complicated designs as well as inadequate project management have also been contributing factors.

"We are working to ensure that this challenge (overruns) is met," Moleketi told a press briefing on preparations for the 2010 Fifa World Cup.

Aside from more money from the national fiscus, institutions like the Development Bank are being called in to negotiate loan packages for host cities.

Moleketi says the national fiscus is prepared to "soften" the loan burden for host cities by doing things like providing a window period in which Treasury would help service loans.

But, Moleketi stressed repeatedly that host cities had to take joint responsibility for the increased costs, especially considering that many had opted for complex, and therefore expensive, designs for their stadia.

The Nelson Mandela Stadium in Port Elizabeth, for example, requires a steel roof that is being manufactured in Kuwait. Aside from the costs, the manufacturing and transport of this roof has meant that the stadium will not be ready for the 2010 "dress rehearsal", the Confederations Cup, which will be held in South Africa in December 2009.


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