Pretoria: The stadiums under construction for the 2010 World Cup and associated infrastructure will cost an estimated R2 billion more than budgeted for, the government has said.

This would bring take the R9.6bn allocated in this year’s budget to R11.6bn, government 2010 World Cup spokesperson Tiyani Rikhotso said.

The R2bn overrun, announced by Deputy Finance Minister Jabu Moleketi at a media briefing here, included “all infrastructure associated with the 2010 Soccer World Cup”, Rikhotso said.

It included the stadiums as well as transport, communications, security and other infrastructure.

“The overruns are caused by cost creep, input cost escalation and foreign exchange deviations,” Rikhotso said.

Earlier, Moleketi told journalists the extra cost would have to be borne by the host cities and the national fiscus.

The stadiums would cost more because of “complexities” in the design of some of them, increases in the price of imported equipment and materials, higher steel and international oil prices, and the exchange rate.

Government was discussing the overruns with the host cities.

It was also talking to the Development Bank of SA about a package that would allow the host cities to meet this “financial obligation”, he said.

“National fiscus will have to make a contribution, host cities will have to make a contribution and we have to involve institutions such as the development bank.”

The host cities would have to assume an “equitable” portion of the increased costs, Moleketi said.

He did not spell out how much each of the cities would have to contribute.

He also did not say which stadiums were involved in the cost overruns.

PUBLICATION: Cape Times
AUTHOR: Sapa
DATED: 14th August 2008