The City of Cape Town has come up with several clever ideas to cover its budget deficit and deal with the escalating construction costs of Green Point Stadium, writes Michael Appel.

The metropolitan municipality, like every other 2010 FIFA World Cup host city, has had to deal with rampant increases in the costs of transport, labour and goods since on-site construction began on 22 March 2007.

The city's 2010 spokesperson, Pieter Cronje, explained that since February this year they have been facing a budget deficit of R580 million.

"We are facing a funding gap of about R580 million, but our own plan to cover that shortfall is the sale of corporate suites, as well as the sale of the naming rights of the stadium to a commercial entity.

"Green Point is just a location and there is no branding attached to it, so we are planning to sell the right to brand the name of the stadium after the World Cup," he said.

Mr Cronje added that the municipality was just one of many who were facing similar challenges.

"We believe the funding gap is a problem facing all host cities, but we [as the City of Cape Town] have certainly not sat on our hands, we actually also have a plan to do our bit."

Speaking to BuaNews, Mr Cronje highlighted that when they submitted their initial proposed budget to the National Treasury they allowed for a conservative 10 percent for escalation in costs and 5 percent as emergency funds. However, supply and demand have outstripped those parameters.

"The City of Cape Town is contributing R500 million, the Western Cape Provincial Government about R212 million and national government just over R2 billion, and we have also received smaller amounts from the Development Bank of South Africa (DBSA)," Mr Cronje said.

He explained that their estimates of public sector investment in Cape Town which are linked to the world cup were in excess of R8 billion, but more likely to be R10 billion, while the cost of the actual stadium is estimated to be about R4.5 billion.

"Some of the biggest challenges facing us are time and money, because when you have various role players you have to manage the money and the time very carefully, and you can never drop your guard," he said.

The stadium's site-specific cost is about R800 million because of the location of the stadium, that they hit bedrock at about 8 to 10 meters. Drilling or blasting was not an option as surrounding buildings would have been damaged.

"While we are happy we have a solid foundation, unlike other stadiums, we couldn't excavate but had to go higher up and that's where your costs start to rise due to more crane work," Mr Cronje explained

He said they had to make sure the stadium did not increase the traffic flow due to the proximity of surrounding residential and commercial areas, hence the requirement about public transport, noise levels and unsightly lighting.

Had the stadium been built on a neutral piece of land without any of the above restrictions placed on it, Mr Cronje said the stadium would effectively be R800 million cheaper.

The city faced steep challenges before construction even began, said Mr Cronje, explaining that Green Point Stadium was to be built in the middle of a commercial and residential area.

"We had a legal challenge in the High Court trying to stop us form building this, and we had to go through several public approval and appeal processes, but despite that we have caught up and are currently ahead of the game," said the city's 2010 spokesperson.

With its serene views, diverse fauna and flora and most-recognisable symbol in South Africa, Table Mountain, Mr Cronje told BuaNews that they estimate that every four out of five tourists visiting South Africa will visit the city.

"We are a long haul destination so we expect fewer people will come but they will stay longer with four out of five visitors coming to Cape Town, spending an average of R800 a day," he said.

As Cape Town is not hosting any Confederations Cup matches, the city will be using next year's tournament to test their Public Viewing Areas (PVAs) in the Central Business District (CBD).

There are plans for one official FIFA Fan Park, Mr Cronje said, which has as its centre the Grand Parade and will extend through the CBD and the waterfront right up to the stadium.This idea was based on the FIFA Fan Mile in Berlin which proved to be popular among fans.

There will be three PVAs which will not be under FIFA regulation to be held in Swartklip Sport Centre, Athlone Stadium, and the Belville Velodrome.

Mr Cronje said the city was confident the 68 000 capacity stadium, to be reduced to a 55 000 seater post-2010, is four days ahead of schedule and on track to be completed by the 14 December 2009 deadline. - BuaNews