Global prices push 2010 costs
Shaun Benton
21 November 2007The cost of hosting the 2010 Fifa World Cup is expected to escalate by between R2.8-billion and R3.4-billion, says Deputy Finance Minister Jabu Moleketi.
Briefing the media in Cape Town on Tuesday on the government's progress with World Cup preparations, Moleketi said that it was a key challenge for the state to contain rising costs.
South Africa has already budgeted about R17.4-billion for 2010 projects, including R8.4-billion to build or refurbish the 10 host stadiums and a further R9-billion for supporting infrastructure. The increased cost projections could see total expenditure rising to as much as R20.8-billion.
Moleketi said that government teams working through the 2010 Local Organising Committee as well as the Department of Labour were closely looking into projected cost escalations. No detail would be spared, he said, as these teams pored over the inputs.
He said, however, that the government was looking at the possibility of the rising international costs in input factors rather than the possibility of profiteering by the contractors involved in constructing or refurbishing stadiums.
The exact cost escalations will then be supplied to the National Treasury by the end of December and they will then decide how the government must deal with the issue.
If the amount allocated to World Cup spending needed revision, this would only happen when Finance Minister Trevor Manuel presented the national budget to Parliament in February 2008.
It will also be in the 2008 budget that the costs of information and telecommunications infrastructure for the tournament, a key element to the success of the World Cup, are revealed.
Moleketi pointed out, however, that costs in some areas could actually be reduced, as certain items have been secured at a lower than expected cost. He spoke of the roof of the Green Point stadium in Cape Town as an example, which cost R100-million less than expected even though it has to be imported from Germany.
Source: BuaNews
