2010 costs soar by R3bn

This is due to cost escalation since the project started.

The new amount will take the entire budget to more than R12bn.

This will be more than double the initial budget of R6.7bn agreed when the country was awarded the event in 2004.

The R3bn is needed to top up the R9.8bn that was last allocated by Finance Minister Trevor Manuel last year.

"There is indeed an escalation, but I can't give you the exact figure," said Deputy Minister of Finance Jabu Moleketi, who also heads the SA 2010 Fifa World Cup Local Organising Committee's finance and procurement committee.

He said government was looking at ways of coming up with the needed funds.

"The national fiscal must be involved and we are also looking at having the host cities and the different metros get loans from the Development Bank at very favourable terms," he said.

Moleketi said this was necessary in order not to leave the cities without any funds for service delivery beyond 2010.

Global problem

SA is not in a unique position as the global economic situation keeps changing.

In England, Olympics Minister Tessa Jowell has been under tremendous pressure from opposition parties following the huge escalation of costs for the 2012 Olympic Games.

The current figure is £9.325bn (about R95bn), which is four times the original estimate.

Local Organising Committee chief executive officer Danny Jordaan said his organisation was confident the government would provide the required funds.

"Our government has been very committed to the project," he said.

"These escalations are in line with the global economic trends such as the forever rising petrol price and the exchange rates."

The committee's management body will meet tomorrow, followed by a board meeting on Tuesday.

Issues

Committee chairperson Irvin Khoza said they had a number of issues to tackle, such as:

The escalating costs;
• The budgets for the Confederations Cup 2009 and World Cup;

• Endorsement of the venue managers who have already been appointed;

• A report on stadium construction; and

• Identification of the 27 stadiums that will receive artificial turf as part of the World Cup Legacy project.

  Khoza said despite the challenges, the committee was within its timelines.

  "To date we have submitted the transport plan to Fifa on May 30, the security concept plan on June 30 as well as the tournament operations plan," he said.

  Khoza and Jordaan have accused sections of the local media of making a mountain out of a molehill over Fifa president Sepp Blatter's comments on the existence of a World Cup "Plan B".

  However, Khoza said the Local Organising Committee would touch on the subject with Fifa secretary-general Jerome Valcke, who will be present at Tuesday's meeting.

  "We need to strengthen our information flow process so that the general public is kept in the loop about all the developments around our preparations," he said.

  This week Uefa president Michel Platini warned Poland and Ukraine they had to give cast-iron guarantees over their two main stadiums if they were to keep the Euro 2012 finals.

  - City Press

  Read more about: