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Fifa's World Cup debt trail

Oct 17 2010 14:10
City Press
Johannesburg - Fifa is facing a string of legal suits in South Africa for nearly R1bn in unpaid debts for services provided before and during the World Cup.

The world soccer governing body has not paid about R240m for the buses that transported spectators and the security supplied by police after private security firms pulled out of the games over pay demands.

Host cities are also threatening to sue for unpaid bills amounting to more than R500m for work Fifa allegedly demanded be done around stadiums.

And last week, top executives from the SA Football Association (Safa) went cap in hand to Fifa's headquarters in Zurich, Switzerland, asking for about R60m used to buy hospitality packages.

This comes three months after the end of Africa's first World Cup, which was held in June and July.

Transport parastatal Passenger Rail Agency of SA (Prasa) entered into a R174m agreement with Fifa's Match Hospitality for the provision of buses to transport fans.

Now Fifa faces a R148m lawsuit over the ­unpaid transport bill.

According to Prasa, Fifa was ­expected to settle the bill by ­August 31, but has so far only paid R26m.

Prasa spokesperson Nana ­Zenani said the entity "formally asserts that the matter is in the hands of its legal team".

Zenani would not comment on the agency's next move.

Prasa subsidiary, bus operator Autopax, acquired 570 new buses for R1.4bn for the World Cup.

Fifa spokesperson Pekka Odriozola said they wouldn't comment on the transport bill and referred enquiries to Match.

Match legal adviser Veruschka September confirmed that it ­contracted Prasa to deliver a ­complete bus transportation solution for the benefit of Match's clients during the World Cup.

Financial trouble

September said Prasa had filed a claim against Match, which it is disputing in a private arbitration forum.

However, the police ministry has ruled out a legal challenge to force the Local Organising Committee (LOC) to settle the R90m bill for securing Ellis Park and Soccer City in Johannesburg, Cape Town's Green Point and Moses Mabhida Stadium in Durban.

About 1 300 police officers, mainly trainees, were called to ­secure the stadiums after Stallion Security guards protested over low wages.

"There are no intentions for ­legal pressure or litigation to ­settle the matter because we're confident it will be settled," said police ministry spokesperson Zweli Mnisi.

Mnisi said the department's ­engagements with the LOC "were ongoing, open and mutual".

Last month, police minister Nathi Mthethwa told Parliament the bill was sent to the LOC but police had used their own budget to pay officers.

Meanwhile, Safa president Kirsten Nematandani and chief executive Leslie Sedibe travelled to Zurich last week to ask for ­reimbursement, arguing that the association would not ordinarily have spent the money had it not been for the World Cup.

Nematandani said Safa bought the tickets under the impression that it would receive the profits of World Cup ticket sales.
But Fifa and Safa have since agreed to open a trust account for the windfall that will be ­channelled towards development programmes.

The move to ask Fifa to pay the R60m was seen as an ­indication that the association was in financial straits.

But Nematandani denied this.

"If we were broke, we would have closed shop a long time ago and would not have been able to send Bafana to Sierra Leone on a ­chartered flight and our national under-23 team to Iran," he said.

He added that Fifa had agreed to give Safa the 37 sponsored ­buses that carried national teams to the games.
safa  |  fifa  |  2010 fifa world cup


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