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Ratepayers 'will cough up for CTN stadium'

Oct 06 2010 19:06

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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.
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