South Africa‘s Competition Commission said it’s investigating the award of multibillion rand tenders to build stadiums for next year’s soccer World Cup.

“We have various concerns about the revised budgets which differ significantly from the original plans,” Deputy Commissioner Tembinkosi Bonakele said by mobile phone today. “We’ve been examining infrastructure costs in general, so these stadiums were a natural extension.”

South Africa is building or renovating 10 stadiums across the country for the 2010 Soccer World Cup. The cost of hosting the event, including the construction, has doubled to 30 billion rand ($3.7 billion), Johannesburg-based Rapport said on July 12, citing Danny Jordaan, head of FIFA’s local organizing committee.

The Competition Commission’s investigation was launched in “late May or early June” after stakeholders expressed concern about the rising cost of the stadiums, Bonakele said. While it’s too early to say when the investigation will end, the commission expects to have a “good idea” of whether there is a case to pursue before the World Cup starts in June, he added.

Companies whose contracts are being probed by the investigation include Murray & Roberts Ltd., South Africa’s largest construction company. The “allegations are categorically refuted,” the company said in a statement to Johannesburg’s stock exchange news service today.

Murray & Roberts is a joint-venture partner in group building the Greenpoint stadium in Cape Town, it said.

“The project has been substantially redesigned and construction has been accelerated to overcome delays in award and the consequence of the redesign,” it said.

The head offices of Group Five Construction Ltd., Grinaker Construction Ltd., Wilson Bayly Holmes-Ovcon Ltd., Basil Read Ltd., Stefanutti Stocks Ltd., BAM International and Bouygues Construction, whose contracts are also being investigated, didn’t answer calls seeking comment.

To contact the reporter on this story: Alastair Reed at areed12@bloomberg.net

PUBLICATION: www.bloomberg.com
AUTHOR: Alastair Reed
DATED: 16th July 2009