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THERE are some South Africans who must be feeling a little Schadenfreude at the Indian government’s problems with the Commonwealth Games. Or maybe it’s gratitude, that it didn’t happen to us with the 2010 FIFA World Cup.
Television images of a collapsed footbridge in New Delhi and the appalling conditions that athletes have to stay in have been beamed across the world, damaging India’s credibility.
By contrast, SA had pristine stadiums and wonderful accommodation for the soccer stars. The fear that we would be subject to embarrassing television images over the soccer event proved unfounded.
But, much as I would like to rejoice in that fact, now comes the part in which we count the economic benefits of the soccer tournament.
The Reserve Bank last week came out with a figure showing that travel receipts from non-residents associated with the sporting event amounted to roughly R3.5bn in the second quarter of this year.
Whoop-de-doo. We spent R16bn on new stadiums, and you spent a “whopping” R3.5bn in SA. (Of course, that amount will rise after the third-quarter figures come in, but there’s agreement that most of the World Cup-related foreign spending took place in June.)
Now we have all these stadiums - what shall we do with them?
Some of them are self-financing, but most aren’t. Bloomberg reported recently that Cricket SA dropped plans to host a rival tournament to the Indian Premier League using three stadiums built for the Soccer World Cup because the grounds were too small for cricket.
Cricket SA considered using World Cup venues in the towns of Polokwane, Rustenburg and Nelspruit for an annual 20-20 series in August, according to CEO Gerard Majola.
“It was a viable option for us as the weather conditions are ideal and there is a gap on the international cricket calendar. Unfortunately, as much as we would like to utilise these facilities, the size is too small for us. We were not part of the design process,” Majola said.
Did we get value for money?
It’s clear we didn’t, as the cost of the stadiums wasn’t even covered by foreign spending and they may not make money in future.
If the stadiums were government spending that would have taken place anyway, we can say that it doesn’t matter. But in a country where there’s currently much focus on the failing health system, R16bn for stadiums seems a big sum to pay for something which is, after all, just a game.
It was an unfortunate choice of words, but when officials of the health department recently announced a major refurbishment for SA’s public hospitals, they said the cost would be “more than spent on World Cup stadiums”. The stadiums have set a benchmark in people’s minds for cost.
SA has an electricity distribution infrastructure backlog of about R27bn and a sewage infrastructure backlog of about R23bn. Spending R16bn on stadiums and getting only R3.5bn in spending in return seems like a crazy idea.
Of course, the building of the stadiums created jobs. But so would the spending on much-needed infrastructure.
Indictment of government
One thing that I have to admit is that the benefit of the World Cup lay in the related infrastructure spending, such as the Gautrain, the freeway upgrade and the Bus Rapid Transit system.
It’s true that if it hadn’t been for the World Cup, government wouldn’t have been sufficiently galvanised to make sure this spending took place.
But isn’t that an indictment of government? SA’s creaking infrastructure was an obvious area where spending was needed, so why did it take a tournament to ensure the speedy completion of the Gautrain airport-to-Sandton link, to name just one example?
Now that there’s no World Cup to focus minds, what will get government to take action to address the infrastructure crisis? (If crisis seems too strong a word, just think what will happen when Johannesburg’s ailing electricity distribution infrastructure gives the ghost.)
Many people said that one of the benefits of the soccer tournament was the way in which it caused South Africans of all races pull together to put on a show for the world. They said that that unity of purpose displayed for the Cup should be harnessed now and in the future to get the economy on track.
But it proved to be a false unity, as the public servants’ strike soon after the tournament showed. Ugly scenes at schools and hospitals underscored the fault lines between the governing alliance.
As one trade unionist put it: “We had to convince our members eventually that this was a strike and not a revolution.” Underlying all that joy about the World Cup was the simmering anger of the workers.
The World Cup tourism receipts helped bring down the current account deficit in the second quarter to just 2.5% of gross domestic product. But this is a fleeting benefit, and not one that makes up for the wasted spending the tournament incurred.
- Fin24.com
Television images of a collapsed footbridge in New Delhi and the appalling conditions that athletes have to stay in have been beamed across the world, damaging India’s credibility.
By contrast, SA had pristine stadiums and wonderful accommodation for the soccer stars. The fear that we would be subject to embarrassing television images over the soccer event proved unfounded.
But, much as I would like to rejoice in that fact, now comes the part in which we count the economic benefits of the soccer tournament.
The Reserve Bank last week came out with a figure showing that travel receipts from non-residents associated with the sporting event amounted to roughly R3.5bn in the second quarter of this year.
Whoop-de-doo. We spent R16bn on new stadiums, and you spent a “whopping” R3.5bn in SA. (Of course, that amount will rise after the third-quarter figures come in, but there’s agreement that most of the World Cup-related foreign spending took place in June.)
Now we have all these stadiums - what shall we do with them?
Some of them are self-financing, but most aren’t. Bloomberg reported recently that Cricket SA dropped plans to host a rival tournament to the Indian Premier League using three stadiums built for the Soccer World Cup because the grounds were too small for cricket.
Cricket SA considered using World Cup venues in the towns of Polokwane, Rustenburg and Nelspruit for an annual 20-20 series in August, according to CEO Gerard Majola.
“It was a viable option for us as the weather conditions are ideal and there is a gap on the international cricket calendar. Unfortunately, as much as we would like to utilise these facilities, the size is too small for us. We were not part of the design process,” Majola said.
Did we get value for money?
It’s clear we didn’t, as the cost of the stadiums wasn’t even covered by foreign spending and they may not make money in future.
If the stadiums were government spending that would have taken place anyway, we can say that it doesn’t matter. But in a country where there’s currently much focus on the failing health system, R16bn for stadiums seems a big sum to pay for something which is, after all, just a game.
It was an unfortunate choice of words, but when officials of the health department recently announced a major refurbishment for SA’s public hospitals, they said the cost would be “more than spent on World Cup stadiums”. The stadiums have set a benchmark in people’s minds for cost.
SA has an electricity distribution infrastructure backlog of about R27bn and a sewage infrastructure backlog of about R23bn. Spending R16bn on stadiums and getting only R3.5bn in spending in return seems like a crazy idea.
Of course, the building of the stadiums created jobs. But so would the spending on much-needed infrastructure.
Indictment of government
One thing that I have to admit is that the benefit of the World Cup lay in the related infrastructure spending, such as the Gautrain, the freeway upgrade and the Bus Rapid Transit system.
It’s true that if it hadn’t been for the World Cup, government wouldn’t have been sufficiently galvanised to make sure this spending took place.
But isn’t that an indictment of government? SA’s creaking infrastructure was an obvious area where spending was needed, so why did it take a tournament to ensure the speedy completion of the Gautrain airport-to-Sandton link, to name just one example?
Now that there’s no World Cup to focus minds, what will get government to take action to address the infrastructure crisis? (If crisis seems too strong a word, just think what will happen when Johannesburg’s ailing electricity distribution infrastructure gives the ghost.)
Many people said that one of the benefits of the soccer tournament was the way in which it caused South Africans of all races pull together to put on a show for the world. They said that that unity of purpose displayed for the Cup should be harnessed now and in the future to get the economy on track.
But it proved to be a false unity, as the public servants’ strike soon after the tournament showed. Ugly scenes at schools and hospitals underscored the fault lines between the governing alliance.
As one trade unionist put it: “We had to convince our members eventually that this was a strike and not a revolution.” Underlying all that joy about the World Cup was the simmering anger of the workers.
The World Cup tourism receipts helped bring down the current account deficit in the second quarter to just 2.5% of gross domestic product. But this is a fleeting benefit, and not one that makes up for the wasted spending the tournament incurred.
- Fin24.com
