Host Cities for 2009 Confederations Cup: City of Mangaung (Vodacomd Park), City of Johannesburg (Ellis Park), City of Tshwane (Loftus Versveld), City of Mafikeng (Royal Bafokeng), Nelson Mandela Metro (PE)

Committee: Sport and Recreation

Chairperson: Mr BM Komphela (ANC)

Date of Meeting: 05 Aug 2008

Summary

The Parliamentary legal advisors confirmed that the South African Sports Confederation and Olympic Committee could be compelled to attend Parliament if summonsed. Their President had met with the Chairperson since the Committee’s last meeting and had agreed to meet the Committee after the Olympic Games. There was concern of conflicts of interest with some members who served in Parliament and other institutions. If the Confederation continued to boycott Parliament then it was a possibility that government funding could be withdrawn.

The stadium in the Nelson Mandela Bay Municipality was progressing well. It was about nine days behind schedule but would be ready by the planned date of 31 March 2009. However, they had been removed from the schedule for the Confederations Cup without any explanation. It seemed that the provincial government had indicated that the stadium would only be complete by July 2009. Due to a lack of affordable local expertise, the project team had decided to have the roof manufactured overseas. Members were concerned that delays in the delivery could impact the project. There was a cost shortfall or approximately R500 million. The Department of Sport and Recreation was not sure if it would be possible to appropriate this money.

The City of Mangaung reported that the upgrades on the stadium should be completed by October 2009. Although the planned completion date had been in August, the deadline set by FIFA was only in December. Delays were mainly due to strike action although the fact that the stadium was still in use for rugby and soccer matches did hamper construction. The costs of the stadium were within the budget but some of the money earmarked for other projects such as training venues, Integrated Communication and Technology projects and transport projects had not yet been transferred.

The City of Johannesburg was satisfied with the upgrades of the two stadiums in their municipality. Ellis Park would be used for both the Confederations Cup and the World Cup and Soccer City for the World Cup only. Projects were within budget and progress was on track. Other activities would include transport and beautification projects as well as the erection of the International Broadcasting Centre in the Soccer City precinct. Four training venues were being upgraded including a new Orlando Stadium. Members expressed some concern that small businesses must not be neglected in the accommodation industry. There was also concern about the spending of government money on privately owned stadiums. They were assured that the people would benefit from the government sponsored projects.

The City of Tshwane was using an existing stadium at Loftus Versveld. Only cosmetic upgrades were needed. The main challenge the city faced was the location of the stadium in a residential area. There might be a slight shortfall due to tenders being more than expected. Members discussed the need for fan parks and public viewing areas.

The City of Rustenburg was cooperating with the Royal Bafokeng Nation on the upgrading of the Royal Bafokeng Stadium. There was a shortfall towards this project but the venue should be ready by the end of the year. The city still faced challenges in developing training venues and in ensuring that sufficient accommodation was available. Transport and traffic issues were being addressed. Members raised questions over legacy projects. There was a discussion over the different arrangements for fan parks, which would be mainly funded by FIFA but subject to their regulations, and public viewing areas. Host cities were urged to discuss budgetary problems with the Department of Sport and Recreation.


Minutes

The Chairperson said that the South African Sports Confederation and Olympic Committee (SASCOC) had been invited to attend the Committee’s previous meeting but had made a resolution at their Annual General Meeting to boycott Parliament. They had sent the Committee a letter to this effect and had not attended the meeting. The Committee had given SASCOC the benefit of the doubt, but had referred the letter to the legal department of Parliament. The President of SASCOC, Mr Moss Mashishi, had in fact come to Parliament but Mr Komphela had already left for Johannesburg. Mr Mashishi sent the Chairperson a letter in Johannesburg requesting a meeting. This had been held on 31 July. SASCOC had wanted to apologise and issue a statement. They expressed his need to come to the Committee and apologize for boycotting Parliament. Mr Mashishi would come to Parliament after the Olympic Games in Beijing.

Mr M Dikgacwi (ANC) said that people were making statements about the issue in the media. Reactionaries were at work. Mr Mashishi must come to Parliament. SASCOC could not treat the House as a banana parliament. People had died to see this government come into power. He must come to Parliament and clarify the views of SASCOC. They were out of order. Mr Mashishi must be summoned.

Mr C Frolick (ANC) said that the Committee had agreed to seek a legal opinion on the letter from SASCOC at its meeting the previous week. He asked if this had been received. There were two related issues. There was a Member of Parliament (MP) who was a member of SASCOC and who was part of the collective call to boycott Parliament. There was a similar situation with a member of the 2010 Local Organising Committee (LOC). If no action were taken about these individuals, then an unwelcome precedent would be set.

The Chairperson said that the Committee would deal with these issues the following week. The legal opinion was on his desk. People could be called to Parliament in terms of the Constitution. The process was in place. Mr Mubarak was the LOC member mentioned by Mr Frolick. They were spiting themselves. The work of the LOC would end in 2010. The World Cup was not driven by the South African Football Association (SAFA). It was in fact being driven by the government. The call to boycott Parliament was dangerous as Parliament could withhold the funds necessary to organise the World Cup. If Mr Mubarak was representing SAFA in the call to boycott there could be huge consequences.

Mr E Lucas (IFP) said that the discussion should be held more openly after the Olympic Games.

The Chairperson said that Mr Mashishi would meet with Parliament, but this could wait until after the Beijing Games.

Mr Dan Moyo (2010 Unit, Department of Sport and Recreation (SRSA)) said that the comments attributed to Mr Mubarak were disturbing. It was a serious matter and he took it personally. Messrs Oliphant and Khosa should be called to explain their position.

The Chairperson said that all of the host cities (HOCs) were part of the LOC. If the government was giving money to organisations which were boycotting that very institution then there would be huge implications. All previous World Cups had been organised by the football authorities in those countries. It was only in South Africa where government was getting involved. It had to know what the position was. This issue would be dealt with at the appropriate time.

Mr Frolick asked if any of the other political parties represented on the Committee had tendered apologies for non-attendance at today’s committee meeting. They had now been absent for the last two meetings. They did not attend meetings but commented on the serious issues being discussed outside of Parliament. A letter should be sent to the respective party whips to remind their members of their duties.

The Chairperson thanked the HOC representatives for their attendance. The ANC study group had observed a serious concern. Statements had been made in the last three weeks which raised the possibility of FIFA having an Option B for 2010. The Committee needed clarity on the position of the Nelson Mandela Bay Metro (NMBM). He asked what the reason was for this city not meeting the FIFA deadline. The Committee had seen a programme issued by the LOC, and NMB was not late. He asked if there was another matter involved. The Committee would have to report to Parliament. They needed an indication that NMB was on track.

He asked the presenters to state how far they were behind schedule if they were behind, and what plans had been made to make up time. If they could not do this, then it would impact on their HOC status. The Committee wanted to know what their state of readiness was, and what challenges the HOC’s faced. What was happening was that people were building the stadiums in the cities. The Minister had asked the Committee what social responsibility components were included in the legacy programmes for each project. The stadium builders could not be like De Beers who plundered the land and left nothing but open holes.

The Chairperson said that the Committee was concerned by the sporadic strikes at the various sites. He asked what led to these actions. If proper negotiations were not held with the labour force then the stadiums would not see the light of day. Developers and workers were only interested in their own pockets. There was a distinct pattern. The Confederations Cup would be the basis for the World Cup. He had not seen any progress at the Bloemfontein stadium for three weeks. Perhaps they were working underground, or had almost finished. He stressed that the Committee did not manage the HOC programmes, but nevertheless they had to answer to Parliament.

Mr Moyo said that Sports and Recreation South Africa (SRSA) was concerned about cost escalations and land issues. They wanted to be briefed on the status of the 24 projects involved. Cost escalation was very serious and the Department would need the Committee’s support. A special appropriation might have to be requested.

The Chairperson said that it would be the second time that the Minister and the Director-General (DG) would be calling for an Appropriation Bill if this did come to pass. This had been done in December 2007 already. The Committee now knew what the attitude of SAFA was towards Parliament in their support for the SASCOC boycott. He asked each delegation to limit their presentation to thirty minutes.

Nelson Mandela Bay Metro presentation
Mr Bicks Ndoni (Deputy Executive Mayor, NMBM) introduced the delegation.

The Chairperson regretted the absence of Communications people. The work of communicating the status of World Cup projects was not being done. The public needed to be informed.

Mr Graham Richards (City Manager, NMBM) said that the Metro had provided a narrative report. This included two key pieces of correspondence. One of these was a letter which the NMBM had received on 9 July 2008 from the Chief Executive Officer (CEO) of the LOC. The other was the city’s response. The presentation was a summary of the report.

He said that the stadium project was a complex arrangement. There were many role players, and each had its own structure behind it. The stadium was in a prime position. The CEO of the LOC had said that this stadium would be the best in the country, and perhaps the best in the world. The capacity would be just under 48 000, but this would be reduced after the World Cup when some temporary seats were removed. There were no fewer than 53 consultants involved.

Mr Richards said that FIFA had required that a roof be erected over the western stand. Conservative design principles had been employed but the city had opted to have a roof all around the stadium. He listed the progress of the various phases of the project. The main contract had been awarded to Grinaker. Several phases were already completed. Many sub-contracts had been awarded and this process was 98% complete.

He said that regular programme meetings were held. Engagement with the LOC was intensive and continuous. Members of the LOC made regular visits, and had people dedicated to the Port Elizabeth stadium. The current project was Programme 5, and this had been presented to the LOC Board. This programme was the basis for the announcement that the NMBM would be a HOC for the Confederations Cup. Nothing had changed since then except for considerable progress.

The City Manager was very happy with the quality of production. The roof construction was slightly behind schedule, but the contractor would catch up. He was happy that this would not delay the delivery of the stadium. Issues did arise from time to time. The number of work stations on the roof had been increased and more welders had been employed. The first steel components were now on the water after being manufactured in the Middle East. Work was well advanced. He gave a detailed breakdown of the different aspects of the construction programme. They were exactly in line with the dates. This programme had been accepted by the LOC. The grass for the pitch was being grown off site. Test events would be held in April and May 2009. Three such events were planned. External works were proceeding with cranes being erected on the outside of the stadium. The external features of the stadium were not part of FIFA’s compliance needs.

The Chairperson said that the pictures Mr Richards had shown made him wonder if the sense of history was being considered. Municipalities were missing the chance of making the people part of the construction process. It was not expensive to arrange tours for school groups.

Mr Richards replied that he noted the points. They had kept a record of the progress of construction. Aerial photographs were taken monthly and were displayed on the city’s web site. The media only concentrated on negative stories. The roof was an unusual construction technology, which was the latest in the world. There had been a complex international tender process. It had been constructed on a prefabricated basis. This had been completed in February 2008. There were some issues of concern. The roof design had been adapted for a random erection process rather than forcing the construction company to assemble it in strict sequence.

He acknowledged that the wind could be a problem. There was a process to tie down sections temporarily until the roof was complete. The average wind velocity in both winter and summer was below the velocities which would cause work stoppages.

The City Manager said that labour was a risk factor, but this was the least of all the concerns. There had been a brief period of wildcat strikes. These were limited to a small component of the work force and had been unprotected. The only day on which construction had stopped completely was on an action day called by the Congress of South African Trade Unions (COSATU). Other risk factors were wind, where mitigation factors had to be in place for high wind, and sea conditions as this could delay the progress of the ship bringing the roof units. The quality of construction was world class and that of the sub contractors was up to the standards of the programme.

On the financial side he gave a breakdown of all the cost components. Spending levels were on track. The city had other issues such as transport. A bus rapid transit (BRT) system would be developed. The bus and taxi operators had reached a unique agreement for an integrated system. In terms of accommodation, the Summerstrand Hotel had been entirely booked for the duration of the tournament for the teams. The booking had been cancelled the next day, but by now the hotel was almost fully booked again. Training venues were being upgraded. The city’s volunteer programme was well advanced.

Mr Richards said that the roof action schedule had been the result of extensive engagement with the LOC’s technical team. They had no concerns. An independent planner had been appointed to provide an objective view. This person was an expert on roof installation. The project was nine days behind schedule but there were a number of components which were being kept up to date.

He said that the letter sent to NMBM by the LOC CEO on 9 July was the first indication of any concern. A message was sent to the city at 15h45 on the day that the LOC had announced that Port Elizabeth would no longer be a Confederations Cup host. The Mayor had been advised by telephone that the announcement would be made at 16h00. The Mayor had responded with many of the facts contained in this presentation. The city had responded with a letter requesting a meeting with the LOC Board, but to date this letter had not even been acknowledged by the LOC.

The City Manager said that a financial report was contained in pages 6 and 7 of the narrative report. Originally the Development Bank of South Africa and the provincial treasury would have paid out the allocations. The original estimated cost was R1.39 billion, but the projected cost at present was R1.833 billion. The reasons for the escalation were a separate topic. The NMBM had kept a tight rein on spending until present. The escalations were the result of various factors such as the cost of steel and fluctuations in the foreign exchange rate. The details were contained in the report. The municipality had been the main leaders, together with eThekwini, in making representations to the National Treasury with the other HOC’s. It was not just the costs of the stadium, and the city would continue to engage with Treasury to canvass for further assistance. If this was not forthcoming there would be consequences for service delivery.

He said that the question of social responsibility commitments had been rained. One would expect that there would be some form of quid pro quo given the size of the contracts. It had been a difficult issue to deal with at the tender stage. The issue had been dealt with broadly.

Discussion
The Chairperson said that the point had been raised. There should be a sense of belonging to the community. Companies should not be blackmailed but he did believe that they loved money too much. It would be good if the construction company could leave at least one basic facility for the community. FIFA had provided funds for artificial turf pitches and he asked why the local contractors could not make a contribution. He reminded the meeting that it was not Treasury that determined financial appropriations but SRSA. It would be worse with the Money Bill. The appropriation figures would be determined by the Committee.

Mr Lucas noticed that on one of the slides in the presentation a phase was reported as being 45% complete while the same phase was only 30% complete in the report.

Mr Richards replied that the figures in the presentation had been updated since the report had been compiled.

Mr Lucas said that South Africans always wanted to get overseas tenders and this was the main reason for cost escalations. There was sufficient manufacturing ability in the country. The initial cost of R1.39 billion was up to R1.8 billion. This was a shortfall of R500 million. It was a bit of a worry although he understood the situation. He sensed that the tournament would cater for tourists as local fans would not attend. They were at a disadvantage. The people of the country loved soccer but the majority would not be able to afford tickets. He asked that this be borne in mind.

The Chairperson said that interaction was needed over the external tenders. NMBM had worked within a tight budget and had ordered the most expensive items early in the planning stage.

Mr Richards said that they had operated within a tightly regulated environment regarding the tenders. The roof constructor had to be acceptable to the main contractor. A request for proposals had been issued and there had been some response. It became clear that the technology and skill levels for the roof construction and its components were not available in South Africa. It was a complex exercise. They had the impression that there was an element of opportunism at play both in the NMBM project and in other HOC’s. This was due to the limited number of constructors with this experience. The first round of tenders had delivered prices which were two or three times the estimated cost.

He said that they had then engaged with an expert and tasked this person to find a contractor. This had resulted in a considerable saving. The tender process had been carefully targeted. Of the ordinary construction work there was a substantial local component. There were technical issues.

Mr Richards said that various mechanisms were in place regarding foreign exchange. Cash on hand had been used to purchase cement and steel upfront which had militated against later price increases. Agreements had been reached on foreign exchange rates. Maximum caps had been negotiated. The city had done what it could to militate against price increases.

Mr Dikgacwi asked what the reasons were for the withdrawal of the city’s status as a Confederations Cup HOC. The city said there had been intensive engagement with the LOC. He asked if there had been any engagement with local politicians. If the document before the Members spoke to the situation he could not see why this had happened. South Africa was a country with a government which was paying the costs of the events. The people in the region expected to see matches. The LOC had failed to respond to the city’s letter. People could not be treated this way. Aggressive debate was needed on the legacy issues.

Mr Frolick agreed with Mr Dikgacwi. He requested clarity as to whether there was any interaction between the city and the LOC since the announcement had been made about the withdrawal of host status. He noted that the folder from SRSA containing the presentations bore the colours of the old flag. He said that a document had been tabled at the recent Cabinet Lekgotla. This had reported a completion date of the end of June 2009, but the city was saying it would be the end of March 2009. An explanation was needed.

The chairperson said that the Committee now had conflicting dates. NMBM was offering one date while Cabinet had been offered another.

Ms Xoliswa Sibeko (Director-General: SRSA) said that SRSA had a document with a completion date. This was the result of the Department’s technical report compiled by its own team. Two dates had emerged during an Imbizo. SRSA had been told that the completion date was 31 March 2009. At the Imbizo, the Premier of the Eastern Cape had brought up the date of the end of June. There were serious issues to be addressed such as the roof. The municipality was not really certain about the date. She asked how the plans would be affected if the ship carrying the roofing sections, sank. The original estimate of the technical team was that there would be a cost overrun of R40 million. This had now increased to approximately R500 million. She was not sure where the money could be found. They could not keep running to Treasury for extra funds.

She said that the option of having the roof manufactured in Kuwait was cheap, but construction had suffered due to the delays. She warned that the 2010 related programmes should not be isolated from the Integrated Development Plan (IDP). The programmes had to work together. She said there was one question which had not been covered. She had travelled from Uitenhage to the site of the stadium and had not noticed a single public toilet facility on the road. There was a shortage of public toilets in the city itself. The water quality was also a problem.

The Chairperson said that when the Minister had asked about cost escalations after the first extra appropriation, the Committee had been told that no other costs had been indicated. All costs were then within limits. The HOCs had saved a lot by the early procurement of building material. The Committee had drawn comfort from this. Now a different story was being told. The stadium was being built by the NMBM. The province had not signed the contract and should consult with the HOC before making statements. The question of dates did need to be clarified. NMBM said that the FIFA requirement for the roof was only on the western stand. He asked if this was required for the Confederations Cup or just for the World Cup matches. He told the delegation how he had sat with the President of Egypt in an uncovered stand during the African Cup of Nations Final in Cairo in pouring rain. At the same tournament in Ghana the stands had also been uncovered.

Mr Richards said that roof specifications were for the World Cup. However, the NMBM had never considered an interim arrangement. The Chairperson was correct. They were in fact exceeding the requirement by covering the whole stadium. It was a coastal environment and the tournament would be held in the middle of winter. They had to be prepared for wind and rain. A decision to install a complete roof had been taken in conjunction with FIFA and the LOC’s technical team. FIFA’s requirement was based on protection against the prevailing wind. The stadium would be complete in time for the Confederations Cup.

The Chairperson said that it was clear that the stadium would be complete and would exceed the minimum requirements, but now their chance of hosting matches in the Confederations Cup was being obliterated. The Committee was resolved on this issue. The fact that the LOC had not responded to the city’s request for a meeting was a concern. There was a need to engage with them on how the decision had been reached. When next the LOC was called to address the Committee an invitation would also be extended to NMBM. If the ship transporting the roof sank it would be an extraordinary event and this could not be the basis for planning. The Committee was not convinced that the LOC had made the correct decision. The NMBM had never been consulted on the decision to withdraw the city from the Confederations Cup. Their query had been ignored. The Committee was not convinced that Port Elizabeth had failed to deliver.

Ms M Ntuli (ANC) said that the LOC could not play on people’s feelings. Progress was being made and the municipality had done its job. If SRSA asked about “what if” situations on the logistic front as there could be drama in some cases. She asked if FIFA was saying that the country was failing, and if only Heaven could rescue the situation. She called on the LOC and SRSA to revisit the decision. There were other issues which could be investigated.

Mr Frolick said that SRSA needed to make a comprehensive presentation on the issue of cost escalations. They needed to compare the costs of the new stadiums to those of the existing stadiums which were being upgraded. The Committee needed to find out the real reason. The arguments were not compelling. There should be penalty clauses in the contracts for non-compliance. He asked if FIFA was trying to stick to a historical precedent of using only four venues for the Confederations Cup instead of five, of if they were trying to avoid using a coastal venue. It might also be that they felt Port Elizabeth was too far from the other venues.

The Chairperson asked if SRSA had engaged with NMBM.

Mr Moyo replied that the LOC Technical Committee had reported to the Board. This committee included professionals such as engineers, architects and quantity surveyors. The Department had its own technical team which worked in conjunction with the Department of Public Works. They visited the various sites regularly and conducted meetings with the contractors. From these visits reports were produced which were submitted monthly. In the case of NMBM, the report indicated the information as presented to the Lekgotla. Government’s position was that the stadium had to be completed as per the agreement. The information indicated what was reported. He did not know why the decision to exclude the city had been made. Only the LOC Technical Committee and the Board could answer that question.

The Chairperson said that Mr Moyo was the first line for information. He noted the concerns about public toilets. Temporary toilets could be an option. During the run-up to the Confederations Cup and the World Cup, there was a question about how ordinary people would benefit. Nobody was saying anything about this. The HOC’s would need to explain this issue at the next meeting with the Committee. It could not be a World Cup just for the builders and their shareholders.

Mr Richards said that the presentation had covered all the questions posed in the invitation to attend the Committee meeting. There had never been a question of two different dates. He agreed that engagement was needed on the issue. While the municipality was engaging with the technical teams and the LOC, it was SRSA which controlled the flow of funds. Programme 5 had been presented to all parties concerned, including the full LOC, and had been accepted.

The Chairperson said that SRSA agreed with the NMBM dates. No injustice had been done. The Committee had defended the city.

Deputy Mayor Ndoni said that there were penalty clauses in the plans. The contractors were liable to pay R400 000 per day. He was confident that the target date of 31 March 2009 would be met.

City of Mangaung presentation
Mr George Mohlakoana (CEO Mangaung 2010) said that many points pertinent to Mangaung had been covered in the previous presentation. The match schedules for the Confederations Cup and the World Cup had not yet been released, but the LOC had indicated to the city that they would hose one of the Confederations Cup semi-finals and second round matches in the World Cup.

He said that the city had signed the HOC agreement with the LOC. There were a number of aspects to this and some challenges. The city was fully compliant with the agreement. A clean stadium had to be provided three weeks before the tournament until one week afterwards. Physical signage had to be removed three months before the event. This was a problem as it was an existing stadium and the current users were not affiliated to FIFA. There was a penalty clause in the contract if this was not done, and they had engaged with the LOC on the matter. The rights of all stakeholders had to be protected. There were also questions over the exclusion zone around the stadium. Some of the requirements, such as security, fell outside the competency of local government. Work had to be integrated between the three different spheres of government.

Mr Mohlakoana said that the original allocation had been R1.6 billion. Of this, R920 million had been forwarded to the city in terms of the Division of Revenue Act (DORA). The shortfall was still R958 million. Projects which still needed funding were the training venues (R200 million), the Hoffman Square development, fan parks and Integrated Communications and Technology (ICT) projects (R168 million).

He said that the Bloemfontein venue was an existing stadium which was located within a sports precinct. They were completing upgrades on the main stand which would provide extra capacity. Seating would be increased from 38 000 to 46 000. There was also a requirement to upgrade office space, hospitality areas, media facilities, floodlights and the public address system. The expected completion date was August 2008.

Mr Mohlakoana said that the work was being conducted by a Free State based joint venture. Local labour was being used. The Sector Education and Training Authority (SETA) had recruited 109 of the 400 workers. This covered various building skills. There was some work being done on the north-eastern and southern parts of the stadium but the main work was on the western stand. Additional seating was being provided and a new roof would be fitted. Only 60% of the seats would be covered. The budget for the stadium was R305 million. It was a fixed amount and therefore not subject to inflation. The project would be completed within budget. The city would request that the savings be channelled into other critical projects.

He said that the current hockey fields would be used as a media centre. VIP parking would be provided. On the north-eastern side 2 000 parking bays would be built with a pedestrian bridge linking the site to the stadium. Development to the north was restricted due to the waterfront development there. The stadium would be integrated into the shopping mall. The VIP accommodation would increase to between 615 and 1 000. Hospitality boxes could be sold. There should be a free flow of people entering the stadium but the different stakeholders would be clearly distinguishable.

The CEO admitted that there were challenges to achieving the target date of August. Delays over uncertainty of responsibilities at the start of the project had seen a fourteen day delay, 21 days to strikes and five days due to soccer matches. There had also been delays due to rugby matches. Current progress stood at 55 days compared to a target of 70 days. However, commitment levels were high although he feared that the strike may resurface over the questions of bonuses. Production time had also been lost due to the performance of the contractor. There had been an incorrect estimate at the start of the requirements. The contractor had felt that a single crane would suffice but there were now four cranes on site.

He said that a recovery plan had been put into place. This included the provision of more cranes, improved methodology, longer working hours and motivational talks for the workers. This had led to a significant improvement. He assured the Chairperson that work had been ongoing during the three week period he had mentioned. At that time they were working on constructing the raking beams, and each of these took about two weeks to complete. There were multiple activities on the site.

Mr Mohlakoana said that the question of costs had been raised by the contractor. There had been disputes over payments and the contractor had requested an extension on the completion date. They had requested an extra 65 days. The city’s team had assessed the backlog as one month only. The completion date had been revised to the end of September and the contract amount had been increased by R1.5 million. The contractor had rejected this proposal and the penalty clause for late completion. It seemed that the most realistic completion date was now October 2008. At the outset they had allowed a four month leeway on the FIFA target date of December 2008, so they were still well within the FIFA requirement.

He said that there was a long term agreement with the Free State Rugby Union (FSRU). They held a twenty year lease on the stadium. This agreement had been made in December 2001. Negotiations were underway but the benefits of the construction should accrue to the government. A construction agreement had been signed. The western stand had been placed out of bounds during the construction. This had resulted in a loss of revenue to the FSRU. A claim of R9 million had been rejected. Vodacom had bought the naming rights for R1 million. The city had engaged with the LOC on this issue.

The CEO said that the training venues would be part of the legacy. There were financial challenges and some reprioritisation was needed. The city had to stay within its means. They could not afford delays. The transport plan was a key issue. The Makufe Festival would be used to test aspects of the operational plan. There were several transport projects. The operational plan included water and waste management. Accommodation would be a challenge. There was less available than what was required. There was uncertainty over rental amounts.

Mr Mohlakoana said that the volunteer programme was going well. The city was working with the Police on safety and security. One problem was that the shopping mall at the waterfront development fell within the safety zone and the public could not be denied access. Officers were being trained to boost the emergency services.

He said that the challenges included institutional arrangements and transport facilities. On the business plan some of the allocated funds had not yet been forwarded. This was mainly in regard of training venues and the ICT projects. The delay to the stadium upgrades was also a challenge.

The CEO said that when the World Cup had been awarded to South Africa it had been touted as an African World Cup. Mangaung was looking to incorporate Lesotho into its planning. They had started an engagement in this regard and there were a number of issues to be resolved. The help of some national government departments might be needed. A detailed report had been submitted during the Presidential Imbizo.

Discussion
Mr Dikgacwi asked what the difference in costs was between renovated and new stadiums.

The Chairperson said that the new stadium in Port Elizabeth would cost R1.8 billion while the upgrades to the upgraded stadium in Bloemfontein would cost R305 million.

Mr Mohlakoana said that the total business plan for Bloemfontein was R1.6 billion, of which only R305 million was for the stadium. There was no shortfall. They would be definitely under budget. The only possible exception would be R100 million if there was the 65 day delay indicated by the contractors. He stressed the total business plan involved the whole city.

The Chairperson said that the Mangaung municipality was doing well. The training facilities in Botshabelo and Bloemfontein were part of the social responsibility programme. The ANC had been born in that province, and the centenary celebrations would be held in Bloemfontein. These celebrations would be attended b 50 000 people. There should be a broader cultural legacy. The project was on time. This was most important. The time to talk to the DG was now. ICT would be a key aspect of the competition. He asked how SRSA could help. Practice venues should be included in the whole package.

He asked what arrangements were being made for fan parks. Areas could be branded. Provinces and HOC’s were not talking about this. He mentioned a big station in Germany which was only completed one week before the tournament there had kicked off. The World Cup co-hosted by Japan and Korea had been a difficult event to host. There were many challenges but the World Cup had been held successfully. He agreed that the media tended to concentrate on the problems. He asked if the shortfall had been due to soccer and rugby matches being played in the stadium while building was underway.

Mr Mohlakoana replied that there were two issues in answering this question. The first was of the delays. When matches were hosted, some on a Friday evening, the stadium had to be prepared the day before. Some of the facilities on the western stand had to be used such as the media centre. This meant that construction had to end early on those days. It was especially a problem with unscheduled matches such as play-offs. The contractor could claim additional times. The stadium had hosted international soccer matches played by South Africa and Lesotho in this time. The other aspect was financial loss. The contractor was entitled to compensation from the city for times when they could not work. The costs could perhaps be recovered from the hosts. The FSRU was the operator of the stadium but were entitled to use it. Losses due to matches being staged were small compared to other losses. Not more than two weeks of building time had been lost due to matches being played.

City of Johannesburg presentation
Ms Sibongile Mazibuko (Executive Director 2010, City of Johannesburg) led the presentation for the City of Johannesburg. The city would host two venues. Soccer City would be a World Cup venue while Ellis Park would be a venue for both the World Cup and the Confederations Cup. The city’s mission was to host the best ever World Cup. It also wished to provide a lasting legacy. They had adopted a circular approach. There were three circles of involvement. The first was investment. There was a long lead time on projects. There were many areas of contractual requirements. There were 21 areas of concentration which had been divided into clusters. One of these clusters was legacy projects.

She said that the upgrading of Soccer City stood at 62%. This would not be a Confederations Cup venue. She did wish to include the milestones reached in this presentation. The precinct around the stadium was being developed. They were finalising the three levels of the stands and starting to install seats and the roof. It was close to SAFA house. Although it was described as an upgrade to the existing stadium it was more of a redevelopment. Materials had been ordered well in advance to guard against escalations. Some of this had been sourced locally while some had been ordered from Spain. The material had been delivered. The biggest crane in the world was on site. The project would deliver both on the stadium bowl and the perimeter area.

Ms Mazibuko said that they were finalising the precinct demarcation. This would include areas for housing, transport hubs and the International Broadcast Centre (IBC). The IBC would help to accelerate the country’s own ICT agenda. They were planning this in conjunction with Sentech and Telkom. There would be a redundancy farm to support the site at Honeydew. The private sector would be investing in this project. The Nasrec precinct was an integrated area. This would counteract one of the effects of apartheid which had served to divide Johannesburg from Soweto. The rail stations would be upgraded. Soccer City would be the venue for both the opening and closing ceremonies of the World Cup.

She said that Ellis Park would be the most important part of the Confederations Cup. Construction there had started in October 2007 and should be completed by October 2008. The seating capacity would be increased to 66 000. It would host both the opening and closing ceremonies. Other work to be done included the replacement of the media centre, parking facilities and the roof on the northern stand. Some of the renovations resulted from the board of inquiry which followed the disaster there a few years previously. The cost had been estimated at R250 million. Parking facilities had already been completed to the second layer. There had been problems with the piling as the facility was being built on a landfill site. Access was also a problem.

Ms Mazibuko said that the Ellis Park facilities would be integrated with those of the Johannesburg Stadium. Work had started on the Saratoga Bridge, which was part of the BRT system. Road lights were being designed on a precinct basis. The BRT was under development, and the first phase was complete.

She said that training venues would be at Dobsonville, the Rand Stadium and the Orlando Stadium. The first two of these mere major upgrades while the Orlando Stadium was being totally rebuilt. The toilet facilities at Dobsonville were being upgraded while an athletics tracks and gymnasium were being installed. The electrical system was being upgraded as well. The Rand Stadium was being developed together with the province. The upgrade would include new hospitality suites, changing rooms and a gymnasium. This should be complete by October 2008.

Ms Mazibuko said that the Orlando Stadium was one of the proud parts of Johannesburg. The old stadium had been demolished. A 40 000 seater stadium was being built on the site, and would be a training venue for both Confederations and World Cup teams. Work had started in May 2006 and was expected to be completed by October 2008 and would be handed over the following month. The cost would be R280 million. Of the seating, 94% would be covered. Two stations were being built to improve pedestrian access. Closed circuit television (CCTV) cameras were being installed.

She said that that there would be a fourth training venue at the Ruimsig Stadium. Not much work had to be done there as the stadium was in good condition.

Ms Mazibuko said that there would be a transport hub at Ellis Park. There would be a BRT drop-off zone. There would be easy access to the Soweto highway. The Gautrain was also proceeding. It was a provincial project and would be a major solution to the province’s requirements. The BRT network would cover 122 km, and there would be 115 stations in place for the Confederations Cup. It would help to alleviate traffic jams. The first phase of this was between Sunninghill and Lenasia. There were plan to improve the inner city distribution of commuters. The M1 Soweto highway was complete. The Empire Road link would be a major spine road. Park and ride facilities, with ablution blocks, would be provided in the Ellis Park precinct. A trial run would be held during the rugby test on 9 August.

The area around Nasrec was being upgraded, in particular the sewage systems. Accommodation was a challenge. There was a housing development in this area which would be a high demand area. Seven new hotels were being built including Holiday Inns at Sandton and Melrose Arch.

Ms Mazibuko said that public viewing sites had been identified at Innesfree, Walter Sisulu Park and Mary Fitzgerald Square.  There was a mayoral legacy programme which incorporated projects such as soccer fields, indoor pools, greening of the city and a theatre in Soweto. The private sector was also contributing to this programme. An indoor sports centre would be built in Soweto. The Diepkloof hostel would be upgraded, and parts of it would be preserved as a museum. There were greening projects on the Klipspruit River. Recreational facilities would be established and the council wished to see the water flowing freely in this river again. Many of these projects had been started and the World Cup would act as an accelerator. R90 million would be allocated to development during 2008. Attention would be paid to improving the quality of informal fields in the underdeveloped areas, particularly Soweto. The city was rolling out a beautification project.

She repeated that both the opening and closing ceremonies of the Confederations and World Cup tournaments would be held in Johannesburg. Johannesburg would host the draw for the Confederations Cup on 22 November 2008. Hosting events would be part of the leverage. The million fans campaign was being taken to other areas, in particular Alexandra.

Ms Mazibuko said that in terms of safety and security, Johannesburg would be training an extra 4 000 metropolitan police officers. They were already busy with an intake of 500. Public hearings would be held on the layout of the security rings. The planning for the Ellis Park precinct had to be discussed. This was critical due to the Confederations Cup. A critical issue would be the boundaries of the inner perimeter. There would be restrictions on marketing and vehicular movement. Plans were being drawn up. The biggest challenge was the location of China City. This was a functioning trading site which lay within the perimeter. Emergency and disaster areas had to be defined. Councillors would be taking these issues to their wards.

She said that traffic diversions had to be communicated to the citizens. The only escalations in costs were at Soccer City. This was mainly due to fluctuating foreign exchange rates. The city would give the details to the Department. Ellis Park was working within the maximum budget. Ongoing reports were being made.

Discussion
Ms Ntuli said that the City of Johannesburg had made a good and informative presentation. The country had to be hospitable to the visitors, not just Johannesburg. She asked if the city planned to balance the accommodation availability between small bed-and-breakfast type establishments and the big hotels. They should not just be thinking of big Holiday Inns.

The Chairperson said that while FIFA required five star accommodation for its officials it was not the same requirement for every tourist who would visit the country.

Ms Mazibuko said that there would be a partnership with Southern Sun and the bed-and-breakfast establishments. A visitor had to stay in Soweto to enjoy the full experience. Many smaller establishments were not happy with the prices being set by MATCH. While some had signed contracts with MATCH, others, particularly in the northern suburbs, would not. Even without MATCH’s endorsement they were virtually guaranteed of having full occupancy.

The Chairperson said that the presenters were trying to dodge the issue of contractual relationships. The stadiums were being upgraded with taxpayers’ money which was being spent on privately owned venues. Government would not hand over money to Ellis Park and sponsors like Vodacom. The final word lay with the municipalities and SRSA. The twenty year leases should be revisited, as these had been concluded when the local municipalities had owned these venues. The provision of government funds changed this position completely.

Cllr Ruby Mathang (Member of the Mayoral Committee (Mayco), City of Johannesburg) reassured the Committee that the control of the facilities would remain in the control of government. They belonged to the people of South Africa. The rugby union had tried to negotiate themselves into some of the arrangements. Coca Cola could not succeed in influencing some of the contracts. The control of the stadiums would remain biased towards the government.

The Chairperson remarked that Johannesburg would be the point of entry for the majority of the visitors. The city must not falter in its mission. A lot of government money was being spent and Parliament would have to account to the taxpayer. Matters had to be finalised. The twenty year leases had to be considered. Wrong things were happening.

City of Tshwane presentation
Mr Godfrey Nkwane (CEO 2010, City of Tshwane) apologised for his delegation’s late arrival. So much was happening at present. He presented the capital’s vision and mission. The
City of Tshwane would accept its role as a host city for both the Confederations Cup and the World Cup. Its location would allow it to work closely with the other cities within the province of Gauteng. The match venue would be Loftus Versveld while there would also be some training venues.

He took the Committee through the institutional arrangements. Pretoria had signed a HOC agreement with FIFA. Loftus Versveld was a private stadium which was owned by the Blue Bulls Rugby Union, and there was also a need for an agreement with them as well. A Memorandum of Understanding had been signed on the legacy projects. Government was spending a lot of money on a private facility. The Mayco had formed a steering committee which included the local Premier Soccer League clubs and various other organisations.

Mr Nkwane said that the stadium was still functional, having hosted international events recently. Only cosmetic changes were needed to meet the FIFA requirements. A roof would be erected over the eastern stand. Seats were being replaced. The floodlights and ablution blocks were to be upgraded. There was no configuration changed and FIFA would be able to sell tickets immediately. The estimated completion date was December 2008. The other upgrade was to the public address and evacuation systems.

The Chairperson asked if Tshwane’s dates agreed with those of the LOC.

Mr Nkwane confirmed that they were. He was confident that the target date would be achieved. The budget for the upgrade was R105 million. There was a possible shortfall of R22 million due to the tenders being more expensive than expected. The figures had been based on the feasibility study and not the detailed design. Some line items had been understated.

He said that Loftus Versveld was located in an awkward position as it was in a built-up area. FIFA had its needs and some creativity was needed in order to meet these needs. The city itself was favourable located. The needs of residents would be considered when finalising the inner perimeters and traffic zones. There was a school sharing the eastern fence and a pathway would be created along this fence. There would be a shuttle service between the stadium and the parking areas. There was an existing railway station which would service the stadium. A second station in the area would not be used. Park and ride areas would be set up.

The Chairperson asked why this station was not used. In Germany in 2006 he had visited one stadium where the station was less than 500 metres from the stadium. Spectators stepped off the platform and into the queue to enter.

Mr Nkwane said that the second station fell within the search area and was too close to the stadium. There was an agreement with the LOC.

Mr C Mokoena (Mayco Member, City of Tshwane) said he would take note.

Mr Nkwane said that he was confident that there would be no traffic jams around the stadium. Residents could not be denied access to their homes. Most of the neighbouring properties around the stadium were schools. Colour coded shuttles would take spectators to the correct entrance gates. This would be in accordance with the colour coding of the stadium. There was a plan to make transport manageable during the Confederations Cup.

He said that three training venues had been identified. The first was the Super Stadium, which would be ready in 2009. It had already been used for international matches and had received favourable reports from SAFA officials. The second was the HM Pitje Stadium which was being developed as a legacy project together with the province. It would be ready by December 2008. The third was the Giant Stadium which should be ready by December 2009.

Mr Nkwane said that the city had been discouraged from creating fan parks for the Confederations Cup. They were looking at one or two to be established for the tournament. At least two parks would be funded by the city. Minor upgrades would be made to the water and sanitation systems. The city was working with Gauteng Online to provide the necessary ICT framework. Optic fibre cabling would be used. Some 430 schools would be connected to the network. They were working with Tetra systems for the provision of safety and security agencies. Accommodation and branding issues were being addressed.

Discussion
The Chairperson asked how prepared the city was for disaster management. Given the residential nature of the area there might be a problem of access for emergency vehicles.

Mr Nkwane said that evacuation areas had been identified.

The Chairperson said that it seemed that Tshwane could host matches the next day if so needed. He reminded the delegation to provide a copy of their presentation. He found it strange that the LOC was discouraging fan parks. It would be dangerous to deny people a chance to watch matches. Ways of incorporating the African culture had to be explored. Many provinces were already testing their fan parks. There would be high interest during the World Cup.

Ms Mazibuko said that Johannesburg was going ahead with the public viewing areas it had identified.

Mr Mohlakoana said that the City of Mangaung would test its public viewing areas during the Confederations Cup. They needed funding, even if it came from companies which were not aligned to FIFA.

Mr Mokoena said that fan parks were the responsibility of FIFA. Public viewing areas were a different matter, and Pretoria had identified five sites.

The Chairperson said that these were the same concepts. It was a matter of semantics. There would be no spare tickets during the World Cup, and accommodation in the stadiums would be limited in any event. The Committee would visit the HOC’s a few weeks before the Confederations Cup started.

City of Rustenburg presentation
Mr N Matima (Host City Coordinator, Rustenburg Local Municipality) said that the city had an agreement with the Royal Bafokeng Nation over the use of the Royal Bafokeng Stadium. The project was a joint venture between the two parties. An oversight committee was in place.

The Chairperson said that the provinces were not the authorities to provide stadium funding. SRSA should be represented on this oversight committee.

Mr Matima continued that the stadium was near major roads. A fan park would be established at Olympia Park. This venue had been proposed as a training venue, but it was too far from the hotels booked for the officials. Park and ride sites had been identified. A rugby test had been staged at the stadium recently and traffic had been a problem.

The Chairperson interjected that he had personal experience of a lack of suitable handicapped parking at the stadium.

Mr Matima continued that exclusion and safety zones had been identified. Several established fast food outlets were within the exclusion zone and an accommodation for these businesses would be needed.

The Chairperson asked if there was a budget shortfall.

Mr Matima said that funding was the only challenge which Rustenburg faced. There was a shortfall of some R150 million for the development of training venues. They were engaging with the province, mining houses, SRSA and other bodies for assistance in this regard. They were unsure of how much the operating costs of the fan park would be. They estimated it might be approximately R50 million.

He gave a brief description of the status of projects involving ICT, electrification, greening, volunteers and roads. The N4 would have a bypass leading directly to the stadium. There was a shortfall of R48 million on the stadium itself. The total cost of the upgrades was R165 million. A school in the proximity of the stadium was being developed into a media centre. One of the legacy projects was the relocation of the school to new premises. Extra parking was needed and the pitch was being replaced.

The Chairperson said that the figures in the presentation did not add up.

Mr Matima said that the figure for the stadium should in fact be R465 million. The delivery date of the stadium was expected to be 15 December 2008. Progress was in accordance with the agreed dates. He was confident that the stadium would meet FIFA’s standards. R48 million was needed for the stadium. Renovations were being done on the western part of the stadium. The Royal Bafokeng Nation had contributed R140 million and SRSA R150 million.

Discussion
Ms W Makgate (ANC) asked what legacy projects were being provided.

Mr Matima replied that the legacy projects included two training venues. It was a challenge to find suitable venues within the distances as specified by FIFA. New hotels were being built and he hoped that these would be finished in term. These would also be part of the legacy.

Mr Lucas said that FIFA should be responsible for the R50 million needed for the fan parks.

Ms Makgate said that her constituents in the North West were asking about the benefits for the province.

Mr Kennedy Mosiapoa (North West 2010 Unit) said that this had been considered at provincial level. The Premier had promised to support the HOC. Three districts of the province were not involved and some legacy projects were needed. Four venues had been identified outside of Rustenburg. Each of these would be provided with a public viewing area. The security authorities had advised provincial government to restrict the number of public viewing areas due to concerns over health, management and security. There should be a public viewing area in each of the municipalities of the province. One town should not be used both as a base camp and for a public viewing area. The benefits had to be spread throughout the province. The matter would be taken care of. An organisational structure in the host city had been identified.

Mr Matima said that the Confederations Cup would be used as a dry run for the World Cup. There was a need to embrace the culture of public viewing areas. They would learn about the challenges ahead of 2010.

The Chairperson said that the fan parks were created by FIFA, who would carry the costs. There would be restrictions on these fan parks as determined by FIFA. Rustenburg had been identified as a HOC by the grace of God. It had been in the same situation as the Northern Cape. The North West did not meet the accommodation requirements at present. Government had wanted all nine provinces to be part of the tournament. It had come down to a choice between North West and the Northern Cape. Distances were a problem. The engagements with the provinces had proved to be an eye-opener.

Mr Matima said that the fan parks were seen as a responsibility of FIFA. A letter had been received about shared costs for these venues. This would be based only on the operational costs and not the cost of setting up the infrastructure.

Mr Moyo said that these details were included in the HOC agreement. There was an obligation to provide a fan park. FIFA would contribute US $1 million for each fan park and the HOC would be expected to contribute an equal amount. This would cover the costs of the fan park.

The Chairperson said that Mr Danny Jordaan had said that the fan parks were entirely the responsibility of FIFA. Those public viewing areas not designated by FIFA would be the responsibility of the HOC. FIFA would be hiring big screens for their fan parks. There had been time pressure to sign the agreements, and to an extent the South African government had been blackmailed. Many of the HOC’s had complained about this and were desperate. The city dressing requirements were excessive. FIFA expected the route from the airport to the officials’ accommodation and from there to the venues was to be dressed. There would have been huge expense to HOC’s to achieve this, but FIFA had agreed to reduce their requirements.

Mr Mosiapoa said that there were higher expectations. Legacy issues and funding had to be considered. A budget had been calculated. Changing demarcations would lead to budget cuts. The Municipal Infrastructure Grant (MIG) funds had to be tapped.

Mr R Reid (ANC) said that FIFA was providing $1 million for each fan park. With the Rand strengthening against the Dollar, this was now only equivalent to R7.2 million. He asked who would make up the shortfall.

Mr Moyo said that all the shortfalls faced by the HOC’s should be discussed on a one-on-one basis with SRSA. Motivation was needed for some projects. Legacy issues could be left to the DG. Specific places would not be training venues. Budgets should cover training venues and beautification of the cities. There would be restrictions on the sponsors and suppliers of fan parks. Informal traders would not have access to these venues. It would be a different matter at the public viewing areas.

The Chairperson said that an early meeting was needed with Mr Moyo. An appropriation bill was coming. The country would be ready for the Confederations Cup.

The DG said that municipalities should think creatively around public viewing areas. A “one size fits all” policy should be avoided. In this way each Rand could be stretched. These areas were not controlled by FIFA. No entry fee could be charged in terms of the licence given by the South African Broadcasting Corporation. Provinces had been funded to create legacy projects. She would like to see officials and volunteers being properly trained. Another issue was that municipalities would have to look at their IDP’s. Any savings achieved could be used elsewhere. Funds should be flexible to a degree.

The Chairperson said that Plan A was to host the World Cup in South Africa. This was the only plan. The country was ready for the Confederations Cup. The DG needed to follow a hands-on approach.
 
The meeting was adjourned.