South Africa Soccer World Cup 2010

South Africa Soccer World Cup 2010 Compiled by:

Swiss Business Hub South Africa Pretoria, July 2007

2010 FIFA World Cup – South Africa Official Logo, unveiled on 7 July 2006

Soccer World Cup 2010 – South Africa South Africa was chosen to host the 2010 world Cup in May, 2004 and the resulting excitement at this decision caused a great deal of optimism, both, in South Africa and abroad. The forecast figures (see statistics below) that were an integral part of SA’s decision to enter the bid indicated that the gains for the country would be significant in terms of revenue and increased employment. Come June 2010, an estimated 2.7 million spectators will watch the FIFA World CupTM’s 64 matches played around the country. And when the final is shown, a television audience of up to 2.8 billion people will have their eyes glued on South Africa.

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World Cup Statistics • 2.72 million tickets will be sold for the event generating a total ticket revenue of R4.6 billion. Summary of costs and benefits Costs Benefits R2.3 billion upgrade of stadiums and • ZAR7.2 billion paid in taxes infrastructure • ZAR21.4billion contribution to GDP • 159,000 new jobs Expenditure due to increased demand • ZAR12.7 billion in revenues earned from spectator spends (Source: Grant Thornton, Kessel Feinstein – SA 2010 Soccer World Cup Bid – Economic Impact Report)

Economic Opportunities Certain areas are limited to FIFA and its sponsors and there will be sales restrictions on sales, marketing and advertising in designated areas such as stadiums. There will, however be significant opportunities for business generally, particularly in tourism, stadium construction, infrastructure (planning, technology, construction, etc.), IT and telecommunications, security and insurance. Construction All in all, ten stadiums in nine cities around South Africa have been selected. The various venues will have to either be built from scratch or, where already in existence, upgraded to meet the standards required by FIFA. Stadium FNB Stadium, Johannesburg

Capacity 94,000

Ellis Park Stadium; Johannesburg

60,051

Moses Mabhida Stadium, Durban Loftus Versfeld, Pretoria

70,000

Green Point Stadium , Cape Town Vodacom Park, Bloemfontein

70,000

Royal Bafokeng, Rustenburg

40,000

Peter Mokaba Stadium, Polokwane Mbombela Stadium, Nelspruit

45,000

Nelson Mandela Port Elizebeth

55,000

Stadium,

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45,000

40,000

45,000

Building requirements Partial demolishment – complete renovation Budget – ZAR1.56 billion Increase in seating facilities, extension of parking facilities, modernisation of surrounding area. Budget – ZAR 2 billion New stadium Budget – ZAR 1.83 billion Modernisation of floodlight, sound and electronic scoreboard systems Budget – ZAR 99 million New Stadium Budget – ZAR 2.7 billion Increase in capacity, renovation of changing facilities, Media centre construction Budget – ZAR 221 million Partial demolishment, complete renovation Budget – ZAR 1.56 billion New Stadium Budget – ZAR 716 million New Stadium Budget – ZAR 875 million New Stadium Budget – ZAR 981 million

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Infrastructure A massive upgrade in infrastructure has also been planned from upgrades in the road systems to increased public transport systems and new commuter services such as the much lauded Gautrain project. All intended to be able to cope with what is seen as a huge influx of visitors for this prestigious event. A great deal of emphasis has also been placed on the high quality of South Africa’s tourist industry. However, negotiations have been and are taking place to increase the available accommodation in most of the cities chosen to host the various games.

The Gautrain is being built by a Canadian-French-South African consortium (Bombela) which will cost something in the region of ZAR25 billion. It will link Johannesburg, Pretoria and OR Tambo International Airport. Government is to foot ZAR21.9 billion with a further ZAR3.5 billion coming from the private sector. The first link in the network started on 28 September, 2006 and it is estimated that it will take 45 months to be completed. Work is progressing and I was assured by members of Bombardier Inc. (the Canadian part of the consortium) at the recent RailAfrica exhibition that this first part should be in place for the World Cup. About R6 billion has been spent to date which equates to about ZAR3 million every hour. Approximately 2,500 South Africans are currently employed on the project, plus about 200 from other countries and this is expected to rise to 6,500. By the end of April 2007 the project reported significant impact on socio-economic development in the following areas: •

25% Black persons’ shareholding in the Bombela concession company through the Strategic Partners Group (SPG) – its BEE partner.

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About ZAR246 million has been spent on the procurement from, and subcontracting to, BEEs.

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About ZAR48 million has been spent on procurement from, and subcontracting to new BEEs.

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About ZAR75 million has been spent on procurement from and sub-contracting to SMMEs.

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South African materials, plant and equipment to the value of about ZAR79 million have been purchased.

Another interesting aspect of the project, particularly from a South African point of view is the skills and development programme initiated by the Bombela concession. More than 2,000 people have already passed through this training programme, providing much needed skills that are sadly lacking in South Africa. Furthermore the Department of Transport has also let it be known that there are three more Gautrain-type rapid-rail proposals on the cards. One each for Cape Town, Durban and Pretoria. Bus transport improvements are also planned in all of the cities where the stadiums are based, and those plans are well underway in Johannesburg and Pretoria. But Nelspruit and Durban are following suit.

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Johannesburg, the only city to have two stadiums selected and will host the final, has also been selected to house the International Broadcast Centre (IBC). The centre will have to cater for around 2,000 journalists. Telkom SA and Neotel will be providing the communications network infrastructure. Another industry sector that should do very well out of the World Cup is that of tourism. One city for example, Bloemfontein, is currently negotiating with nearby towns of Kimberley, Maseru, Ladybird and Welkom to increase the number of beds that will be available for the occasion.. Bloem currently has approximately 7,000, but forecasts that 20,000 will be needed. The revenue earned from tourism in 2006 amounted to ZAR66.3 billion with 8.4 million arrivals in the country. This contributed 8.3% to the GDP and employed about 947,530 people either directly or indirectly. A significant proportion of those visitors are in South Africa on business or on business tourist trips, a trend that is likely to increase over the next few years. Particularly as there is a big drive currently to make South Africa one of the top ten destinations in the world for conferencing by 2010. In the last ten years South Africa has moved from 63rd to 27th In the league table of congress destinations. One of the other sectors that is likely to gain the most value is the Insurance Industry. This is due to the fact the risks involved in constructing, renovating and running new and improved stadiums and infrastructure have to be covered – plus, obviously, travel insurance has to be provided for visiting fans. Crime A major drawback to South Africa hosting the World Cup is inevitably, the much publicised, high level of crime. It cannot be denied that this is a serious problem, but having said that South Africa has hosted major sporting events in the past (1995 Rugby World Cup, 1996 African Cup of Nations, 2003 Cricket World Cup and a number of major international conferences) without any major mishaps. Proactive planning to ensure a successful event is underway with for example the Safety at Sports and Recreational Events Bill which was drafted as early as 2004 and is currently being reviewed. The South African Police Service (SAPS) started, apparently, planning for the occasion three years ago and intend to drastically increase police numbers and the number of private security personnel to be deployed. In addition, foreign police forces will be supporting the South African Police Service (SAPS) with their greater experience in crowd control, etc. A further risk that has arisen in recent months is the inability of the state run electricity company ESKOM to provide electric power. It is hoped that the current problems in supply will have been solved by 2010. Institutions, associations and ministries which will play a major part in organisation of the SWC 2010, as well as the provincial governments of the eight host provinces. Organisers 2010 Local Organising Committee (LOC) South African Football Association (SAFA) Ministries & Institutions Department of Environmental Affairs and Tourism Department of Sport and Recreation Department of Transport National Treasury

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Provincial Governments (Host Provinces) Eastern Cape Free State Gauteng Kwazulu-Natal Limpopo Mpumalanga North West Western Cape

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Sources: www.sa2010.gov.za www.joburg.org.za Business Day Tuesday July 24, 2007 www.project2010.net www.news2010.de Railway Africa NewsXpress Friday July 27, 2007 University of Pretoria ISSUP bulletin

Date: Author: Author’s Address:

July 2007 Swiss Business Hub South Africa c/o Embassy of Switzerland P.O. Box 2508, Brooklyn Square, 0075 South Africa Tel: 012 452 0681 Fax: 012 346 2621 E-Mail: [email protected]

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