Ratepayers 'will cough up for CTN stadium'

2010-10-06 19:06

Cape Town - Ratepayers will end up paying for Cape Town stadium's operating costs after Sail Stadefrance walked out on a 30-year lease to manage the property.

"We do not have final numbers on what this will cost the ratepayer. In the end it will be up to the citizens of Cape Town on whether they come to the stadium to support the teams and events," the city's acting mayor Ian Neilson told reporters on Wednesday.

The city will take over management of the R4.4bn stadium.

Sail Stadefrance said it had projected "substantial losses" if it took up the project.

Sail Stadefrance Operating Company (SSOC) chief executive Morne du Plessis said "unresolved matters" affecting the viability of the lease, due to start on November 1, and "severe operating constraints" had caused the company to withdraw from the lease.

"The operating cost was surprising," he said. "The maintenance costs were way above expectations.

"In the light of unresolved matters that materially affected the viability of the lease and severe operating constraints, we have advised the city that SSOC would not be in a position to enter the lease on 1 November 2010, as the shareholders were not prepared to enter the lease under circumstances that projected substantial losses."

Du Plessis said the company had indicated that it was willing to accept an extension of the management contract amended to include a risk and reward structure with specified timelines to deal with unresolved issues that affect business viability.

"Unfortunately the city and ourselves were not able to reach agreement on these amended terms," he said.

The chief factors leading SSOC to withdraw were high costs of maintaining the stadium, the failure to secure anchor tenants and "business constraints".

Du Plessis said the running of Green Point Park, next to the stadium, was proving to be a major cost.

Neilson said the national government, which invested R10bn in Cape Town's infrastructure before the 2010 World Cup, had to carry some of the responsibility for managing the stadium.

The city, which invested around R2bn of its own money before the tournament, had no choice but to build its World Cup stadium in Greenpoint as cheaper sites at Athlone and Newlands were "not suitable" to soccer's governing body, Fifa.

"We had no choice. It was Greenpoint or don't be involved in the World Cup.

"In the end hundreds of thousands of people came to Cape Town during the tournament and saw what we can make happen. You can't put a number on that.

"It is national government who put the stadia up. It must take some of the responsibility."

Neilson said the city was still to hold discussions with Western Province Rugby about whether it would move from Newlands and host its games at the stadium.

One of Western Province Rugby's main concerns about the stadium had been its lack of corporate suits.

Neilson said the city was prepared to look at expanding the number of suites in the stadium.

"Boxes would be an issue, but there are solutions to that."

The city would take over the management of the stadium "for the foreseeable future", he said.

"We will manage the stadium until we see a way forward.

"It is not our vision to take over the permanent running of the stadium."

In a briefing to Parliament earlier this year, director of the city's 2010 operations Lesley De Reuck said the current operational and maintenance costs, including management of the adjacent Green Point Park, were around R46.5m a year.

  • Sean - 2010-10-06 19:44

    I am not going to confess to having all the details and there maybe much more behind the sences that I may be aware of ....but on a simplistic view how could those that backed the projected have ever thought that it would be viable for a mere 8 world cup games. do not get me wrong I went to the matches and enjoyed myself , but eeven me a a complete layperson can see that there was no way that this stadium was going to be anything other than a "drain" on thoise in Cape Town. R 46 million per year is a substantial amount to generate to break even !!!

  • ouch - 2010-10-06 19:53

    OUCH!!!!! My head is beginning to hurt... ... .....

  • Pie in the Sky - 2010-10-06 21:18

    Fantastic stadium - wrong time, wrong place.In a sea of poverty best option is to demolish it ASAP and senf FIFA the bill. Bunch of arrogant non-caring people

  • LOuis - 2010-10-07 00:36

    Can I please say that I DESPISE sepp blatter

  • pauler - 2010-10-07 07:19

    Zille leaving us with a lifetime legacy of debt and an unprofitable white elephant! Always easy for her to comment from the side line....Major of a year leaving us to pay for her glory!

  • JC - 2010-10-07 07:32

    Where is Danny Jordaan ???? Surely he is responsible to come and clean up the mess he and his cronies left as a legacy to the country. And to think Greenpoint is not the only stadium. Frightening to say the least !!!!!!!

  • Hans - 2010-10-07 08:12

    The honeymoon is over - all the politicians, cadres and other parasites had a great party, but now Joe Citizen has to pay for an extravagance that we never could afford in the first place.

  • AJ @ pauler - 2010-10-07 08:16

    IN addition to showing gross neglect of teh actualy facts, Zille and her family are still rate payers themselves.

  • Shams - 2010-10-07 09:03

    The only feasible solution I see, is that CPT City swops the Green Pojnt stadium for Newlands stadium with Western province Rugby. City can then sell off the Newlands property as their income and WP Rugby still own their stadium, which will then be used for rugby and WP Rugby can rent it out for other events. This will be cheaper than CPT City trying to run the stadium which will only cost us rate-payer 100s of R millions every year

  • Chris Potgieter - 2010-10-07 09:12

    Well now lets wait and get a full accounting of what it cost Cape Town ratepayers. The city has to have venues and this one came cheap because most of the country contributed via taxes on salaries. What a great venue for sport lovers to go spend some leisure hours and let the small increase in rates and taxes be gladly paid.

  • SAD! - 2010-10-07 09:53

    Time to bring in the bulldozers... Great venue but way too expensive for rate payers like myself to maintain. As a soccer venue on its own it will never be self-sustainable, and I don't foresee Rugby leaving Newlands in a hurry. It does make a fantastic live event venue rip up the pitch, put in a stage and let the circus show begin - We have enough clowns running this city to keep it entertaining!!!

  • Solo - 2010-10-07 09:54

    The western province rugby union/stormers should have jumped at the opportunity to make this their home. But instead they stuck in the past and want to remain at Newlands. Let all their supporters/rate payers now pay for their white elephant.

  • WKamalie - 2010-10-07 10:21


  • MORONS - 2010-10-07 11:02

    The math: R46m per year = R3.833m per month CT Rate payers? I dont know but lets say 800 000. This amounts to a wopping R4.80 per month extra on your rates. Thanks for the stadium! Let the city take it over and lets start hosting big events. Morne du Plessis and his profit leaching company can go away - CT can manage it thank you very much!

  • pc - 2010-10-07 13:38

    i dont mind to pay more on my rates, but then i want to get benefit. free games or discount for ratepayers. non ratepayers pay xtra per game.....

  • proud supporter - 2010-10-07 13:42

    Leave WP & stormers in Newlands.. the spirit of the game will die in town. you cant have a braai and drinks before the game...

  • Alwyn - 2010-10-07 16:33

    To MORONS: 800 000 ratepayers in Capetown??? Are you a moron? I'd be very optimistic and surprised if there are 20000 ratepayers who pay any rates worth a damn... Now normally if somebody makes a profit from a venture they have to pay money in the process of acquiring the profit. So how about we actually find the people who did profit from this stadium and have them foot the bill?

  • pass the buck - 2010-11-10 14:07

    Why not dismantle and sell it on to Brazil?

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