Cape Town – Budget overruns across the 10 stadiums being built or upgraded for the 2010 Soccer World Cup have soared to R3,2bn, and the host cities will have to foot the bill for most of the extra money.

This emerged yesterday when Sport s Minister Makhenkesi Stofile, in a written reply to a parliamentary question from Democratic Alliance MP Donald Lee, said the original budget of R9,8bn would be overshot by R3,2bn.

This follows the provision by Finance Minister Trevor Manuel in the medium-term budget policy statement of an extra R1,4bn to pay for the stadiums. He said this was government’s contribution to the overruns and the host cities had to find the rest.

The original budget for the upgrade of Soccer City in Johannesburg was R1,676bn, and the overrun is expected to be R641m on completion. The upgrade of Coca-Cola Ellis Park was to have cost R246m, but will now cost R1m more.

Cape Town’s new Green Point stadium was originally budgeted at R2,4bn, and would now cost R953m more, coming in at about R3,3billion.

Stofile said the Moses Mabhida stadium in greater Durban was to have cost R1,9bn, and would now overrun this amount by R852m.

Nelson Mandela Bay’s stadium is R429m more than its original R1,1bn budget, while the R935m price tag of the Mbombela stadium in Nelspruit will increase by R51m.

The Peter Mokaba stadium in Polokwane had a budget of R917,5m, and this is set to grow by R244m.

The upgrade of Mangaung stadium in Bloemfontein was to have cost R240,9m, and it is estimated that it will now cost R22,8m more. The upgrade to the Royal Bafokeng Stadium in Rustenburg is in a similar situation, with a budget of R157,7m set to increase by R45m. The upgrade to Loftus in Pretoria will also overshoot its budget of R106m by R20m.

Stofile said the main reasons for the escalations were “poor planning during the feasibility stage (planning stage), errors created by host city consultants, the procurement method chosen (prices subject to escalation vs fixed price), market forces, and changes to the Fifa and local organising committee requirements”.

Manuel’s medium-term budget policy statement said preparations for the tournament remained “on course”, though costs had escalated beyond the initial budget. “Government will provide funding to accommodate part of the cost overruns, with municipalities sharing this burden.”

In response to a further question from Lee, Stofile also confirmed that he had been alerted to the “construction challenges” at the Nelson Mandela Bay stadium in Port Elizabeth. The stadium was withdrawn from the five that were to host Confederations Cup matches next year. He said he had regular reports from the 2010 government co-ordinating committee, and the local organising committee.

“The progress in relation to the revision six programme is 28 working days behind schedule on the critical path, due to the weather conditions and the legal claims instituted by the contractor against the municipality, as well as unresolved issues around the hazard identification plan and risk assessment in preparation for the erection of the roof trusses.

“A communications problem between the roof manufacturers in Kuwait and the consultants on site is causing uncertainty on the delivery of the materials to the stadium.

“It is highly unlikely that the 31 March 2009 finishing deadline will be met. There is a high risk of labour unrest, like in all other 2010 stadia projects,” Stofile said.

PUBLICATION: Business Day
AUTHOR: Wyndham Hartley
DATED: 2nd December 2008