2010 costs rise again as city seeks to reel in extra R2,2bn

NELSON Mandela Bay now faces a shortfall of R2,2- billion for projects connected to next year‘s Fifa World Cup – including nearly R2-billion for transport infrastructure and R261-million for the North End stadium.

46 500 seater Nelson Mandela Bay Stadium

This could mean a dramatic scaling back, particularly on the transport projects, and it also seems likely that the city will have to borrow money to finance those crucial to hosting the event.

The council‘s Budget and Treasury Committee was told yesterday that an estimated R3,5-billion was required to complete all 2010-related transport projects.

However, the city had only received R474-million as a transport grant for the 2008/09 financial year period until next month. Another R1,05-billion had been approved for the 2009/10 and 2011/12 state financial years.

This left a transport cost shortfall of R1,97 billion.

A report to the committee said there had been “various interactions” with the Department of Transport regarding the shortfall but that “no commitments have been made in this regard”.

As a result, the municipality “had prioritised projects in line with approved allocations”.

With regard to the stadium, the report said the estimated cost was R2,065-billion – of which a total grant of R1,24- billion had been received up to the end of next month and a further R135-million approved up to 2011/12.

In terms of the agreement, the national Treasury is committed to funding 70% of the total – which means it still owes R70-million.

As far as the province – which is committed to paying 20% of the total cost – is concerned, the municipality had received only R222-million of the R413-million, leaving a shortfall of R191-million.

The report adds that a final cost report was submitted to the provincial Treasury on April 20 and “further interaction with both the national and provincial governments is required to recover the shortfalls”.

Reacting to the report, DA caucus leader Leon de Villiers warned that the R261-million was “not something that this metro can afford to carry”.

The municipality is also finalising the business plan to host the tournament and this also affected the budget process, the committee was told.

The national Treasury is to provide a 2010 World Cup Operating Grant “to assist host cities” with a range of costs connected with the tournament.

These funds must be used for the recruitment of volunteers, additional street signage, city beautification and the preparation of training venues, public viewing areas and fan parks.