South Africa‘s government allocated an extra 1,4 billion rand ($136 million) to stadiums for the 2010 soccer World Cup as building costs mounted, and a further 600 million rand to provide Internet access to the stadiums.

“The 2010 FIFA World Cup preparations remain on course, though costs have escalated beyond the initial budget,” the National Treasury said in its mid-term budget released in Cape Town today. “Government will provide funding to accommodate part of the cost overruns, with municipalities to share this burden.”

The additional allocation brings the direct cost of hosting the tournament to 28 billion rand. The world’s most-watched sporting event should boost gross domestic product by about 1 percent and attract 450,000 non-African visitors, according to the Treasury. Labor unions say money being spent on stadiums would have been better spent on building houses and fighting poverty.

Two years ago, the government said the tournament would cost 15.1 billion rand, including the construction of five stadiums, the upgrade of five others and the improvement in transport links.

Today’s figure and that of two years ago are not compatible because the price tag now includes the cost of building additional infrastructure and improving security, said Malcolm Simpson, a deputy director-general at the National Treasury.

South Africa won the right to host the 32-nation World Cup in 2004 over Morocco and Egypt, becoming the first African nation to organize the event. Strikes at several stadiums have delayed construction and pushed up costs, while steel and cement prices have risen.

Murray & Roberts Holdings Ltd., Wilson Bayly Holmes-Ovcon Ltd. and Group Five Ltd. are among the South African construction companies that have won contracts to build the stadiums.

AUTHOR: Mike Cohen and Nasreen Seria
DATED: 22nd October 2008