THE Nelson Mandela Bay municipality has decided to downgrade Port Elizabeth's
2010 World Cup stadium because the Eastern Cape government has not paid
the R212m it had committed to the project, the Herald Online reported
yesterday.
However, the province said it remained committed to the development and
would release the funds if the municipality could explain why the budget
had shot to more than R1,2bn.
Provincial government spokesman Phapama Mfenyana said the municipality
did not have the authority to make changes to the original design, as
the stadium also belonged to the province.
'Our contribution is not in question, but Bhisho first wants the municipality
to provide a detailed breakdown of what has caused the budget to overshoot
to R1,2bn.' It was initially estimated that the stadium would cost R250m,
but the figure increased to R711m last year, and finally to R1,2bn. This
left the municipality with a shortfall of R262m, with the national treasury
saying it would not allocate more funds.
Municipal manager Graham Richards said 2010 executive director Errol Heynes
had expressed concern at the lack of response by Bhisho to the muni-cipality's
request for a guarantee on the provincial government's contribution to
the shortfall. 'The matter has become quite urgent and therefore instruction
has been given to the technical team to reduce certain areas within the
stadium to incur further savings until other sources of revenue are secured,'
said Richards.
The cutbacks would reduce the sustainability of the stadium, but it will
remain Fifa compliant.
Richards has in the past said that some of the reasons for the increase
in the construction budget were increases in the cost of equipment, the
high level of construction activity, possible shortages of building materials,
possible shortage of skilled labour and the nature of the project, which
is considered high risk.
Cape Town mayor Helen Zille was also facing a similar problem which she
resolved when she approached the private sector to raise the balance of
resources needed for the stadium.
In March, Zille surprised the opposition when she announced that construction
of the 2010 World Cup Green Point project would go ahead, after Investec
stepped in to provide a R185m guarantee on future income for the stadium,
making up the budget shortfall.
, 26/06/2007
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