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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 televi-
sion 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 Im-
pact 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 Capacity Building requirements


FNB Stadium, Johannesburg 94,000 Partial demolishment – com-
plete renovation
Budget – ZAR1.56 billion
Ellis Park Stadium; Johan- 60,051 Increase in seating facilities,
nesburg extension of parking facilities,
modernisation of surrounding
area.
Budget – ZAR 2 billion
Moses Mabhida Stadium, 70,000 New stadium
Durban Budget – ZAR 1.83 billion
Loftus Versfeld, Pretoria 45,000 Modernisation of floodlight,
sound and electronic score-
board systems
Budget – ZAR 99 million
Green Point Stadium , Cape 70,000 New Stadium
Town Budget – ZAR 2.7 billion
Vodacom Park, Bloemfontein 40,000 Increase in capacity, renova-
tion of changing facilities,
Media centre construction
Budget – ZAR 221 million
Royal Bafokeng, Rustenburg 40,000 Partial demolishment, com-
plete renovation
Budget – ZAR 1.56 billion
Peter Mokaba Stadium, 45,000 New Stadium
Polokwane Budget – ZAR 716 million
Mbombela Stadium, Nelspruit 45,000 New Stadium
Budget – ZAR 875 million
Nelson Mandela Stadium, 55,000 New Stadium
Port Elizebeth 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 (Bom-


bela) which will cost something in the region of ZAR25 billion. It will link Johannes-
burg, 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.

• About ZAR246 million has been spent on the procurement from, and sub-
contracting to, BEEs.

• About ZAR48 million has been spent on procurement from, and sub-
contracting to new BEEs.

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

• South African materials, plant and equipment to the value of about ZAR79 mil-
lion 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, provid-
ing 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, Dur-
ban 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 Nel-
spruit 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 tour-
ism. 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 con-
gress 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 publi-
cised, high level of crime. It cannot be denied that this is a serious problem, but hav-
ing 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, appar-
ently, planning for the occasion three years ago and intend to drastically increase po-
lice 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 Provincial Governments (Host Prov-


2010 Local Organising Committee (LOC) inces)
South African Football Association Eastern Cape
(SAFA) Free State
Ministries & Institutions Gauteng
Department of Environmental Affairs and Kwazulu-Natal
Tourism Limpopo
Department of Sport and Recreation Mpumalanga
Department of Transport North West
National Treasury 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: July 2007


Author: Swiss Business Hub South Africa
Author’s Address: c/o Embassy of Switzerland
P.O. Box 2508, Brooklyn Square, 0075
South Africa
Tel: 012 452 0681
Fax: 012 346 2621
E-Mail: pre.sbhsa@eda.admin.ch

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