 The South African government has staked its reputation on a successful World Cup in 2010. “Success” equates with expensive stadiums the likes of which the world has never seen.
The BBC reports that two hospitals in the Northern Cape have been delayed as the money required has been transferred to building stadiums. With the costs already running exponentially over budget, the question arises: how much is too much?
Numerous studies have been conducted looking at the value of the World Cup to our economy. A Pretoria University study puts it at R 5 billion, 0.28% to GDP and the creation of 20 000 short-term jobs.
Grant Thornton, in a report issued as part of the official government application to host the cup declares that the event will: lead to direct expenditure of R12.7 billion; contribute R 21.3 billion to the GDP of South Africa; generate the equivalent of 159 000 annual jobs; and an additional R7.2 billion will be paid to Government in taxes.
Since then the cost has ballooned to R 410 billion. And that was before the stadium tenders were awarded. These have been some 30% higher than expected. For instance, the Cape Town stadium, which was to have cost R 2.6 billion, will now cost R 3.6 billion.
In other words, the total cost of the setting up stadiums and infrastructure could be over R 500 billion. We will be spending about R 100 for every R 1 we make - that is some serious wealth destruction.
The economy has seen tremendous increases in property values as investors price in potential gains from tourism. The future value to the economy has already been priced in and, by 2010, there will be little result for all our investment.
Cape Town will become the proud owner of a stadium so large, and so carefully situated, that it will block out views of Table Mountain from the harbour. And the poor will have been shown that state spending on inappropriate infrastructure is known as a “boondoggle”.
 Blocking out the view people really want to see ...
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