Jul 6, 2008, 10:04 GMT
Johannesburg - Hosting the 2010 football World Cup will set South Africa back much more than initially estimated, with rising costs expected to swell the bill for stadium construction to well over the 9.8 billion rand (1.28 billion dollars) budgeted, according to a Sunday newspaper.
City Press said a further 3 billion rand would be needed to cover the rising costs of an ambitious stadium-building programme, without giving a source for the figure. Five new stadiums are being built for the tournament and five others are being upgraded.
Earlier this year officials in Nelson Mandela Bay said that they had revised the budget for their World Cup stadium from 711 million rand, as projected in 2006, to 1.5 billion rand due to an 'escalation in construction costs'.
The budget for the ten stadiums currently stands at a total of 9.8 billion rand, up from the 6.7 billion rand South Africa initially agreed to spend when it won the right to host the tournament back in 2004.
Jabu Moleketi, deputy finance minister and a member of the World Cup Local Organizing Committee, agreed costs had risen but told City Press he couldn't give an exact figure for the escalation. Earlier this month LOC chief executive Danny Jordaan said he expected the bill to exceed 10 billion rand.
For the extra money, the nine host cities would have to look not only to government but to the African Development Bank for low-interest loans, Moleketi said.
Jordaan said the escalating costs were in line with global trends such as rising petrol prices 'and the exchange rates.' Inflation shot up to 10.9 per cent in May, far exceeding the 3-6 per cent target set by government,
The rand has also fallen sharply against major currencies over the past year, on the back of growing political uncertainty and falling growth, caused in part by an energy crisis.
A weaker rand makes imported raw materials more expensive.
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