Company withdraws from taking over lease of World Cup stadium

Oct 7, 2010, 12:42 GMT

Cape Town - Cape Town ratepayers will have to pay for the operating costs of the Cape Town World Cup stadium after a company that had agreed to take over a 30-year lease withdrew.

A joint venture between a South African company and the company that runs the 1998 World Cup final venue, the Stade de France, had earlier agreed to operate the Cape Town World Cup stadium.

The South African Press Association reported Thursday that the chief executive of Sail Stadefrance Operating Company, Morne du Plessis, said they had withdrawn due to 'unresolved matters and severe operating constraints', which would have led to 'substantial losses'.

'The operating cost was surprising. The maintenance costs were way above expectations,' the former Springbok rugby player is quotes as saying.

'In the light of unresolved matters that materially affected the viability of the lease and severe operating constraints, we have advised the city that SSOC would not be in a position to enter the lease on 1 November 2010, as the shareholders were not prepared to enter the lease under circumstances that projected substantial losses.'

Du Plessis said that high costs of maintaining the stadium, the failure to secure anchor tenants and 'business constraints' had been behind their decision.

Acting Cape Town mayor Ian Neilson said that they did not know at this stage what it would cost local ratepayers. 'In the end it will be up to the citizens of Cape Town on whether they come to the stadium to support the teams and events'

Neilson called on the national government to take over some of the financial responsibility and said that football's controlling body FIFA had insisted on the stadium being built at Greenpoint.

'We had cheaper sites at Athlone and Newlands, but these were not suitable to FIFA,' he said. 'It was Greenpoint or don't be involved in the World Cup.'

The acting mayor said that, for the foreseeable future the city would have to take over the management of the stadium, but that they did not want this to be permanent.

Earlier an official told parliament that the operational and maintenance of the stadium would be some 46.5 million Rand (6.77 million dollars).

Read more about Football WorldCup