THE City’s plan for a private company and independent board to run the show at the Cape Town Stadium has been slammed and dubbed “suspicious”.
The Cape Town Stadium was built at a cost of R4.4 billion, and has been running at an annual loss of about R40 million a year since the 2010 World Cup.
To milk the struggling site, the City has proposed an establishment of a municipal entity to manage and operate it.
The entity will be a private company with an independent board, tasked with appointing a specialised management company whose function will be to reduce the financial burden on the municipal fiscus. The City will be sole shareholder of the private company.
The ANC’s leader in council, Xolani Sotashe, said he would challenge the decision.
“They want to appoint a private company to be in charge of the taxpayers’ asset, which will soon be telling us what to do.
“It would be ideal if the City worked with private bodies to capitalise on events, but it’s not fine that they want the private company to make all the decisions. We will disagree on this in council,” Sotashe said.
Cape Town deputy mayor Ian Neilson could not be reached yesterday. In a statement released at the weekend, he said the establishment of a municipal entity was the proposed preferred management model for the Cape Town Stadium.
“The municipal entity will be tasked with appointing a specialised service provider whose primary function will be the commercialisation of the stadium to increase its use and financial viability. This will ultimately reduce financial dependence on the City’s fiscus,” Neilson said.
Greater Cape Town Civic Alliance chairperson Philip Bam said the City should have cut its losses with the stadium a long time ago, and it was “suspicious” that it now wanted a municipal entity to be established.
“I am concerned that the City wants to cover up its wastage, and protect themselves from the blame of misspending. It’s going to be difficult to make the stadium commercially viable, and at the end of the day, the ratepayers will still foot the bill no matter how you look at it,” Bam said.
An assessment of the financial implications of the proposal showed that 38 staff members would be seconded to the municipal entity.
Liabilities of about R1.2m would be ceded to it.
People can submit their comments and recommendations until December 12 via e-mail to email@example.com, via fax to 086 202 8751, or via a written submission posted to the Office of the Chief Financial Officer, for attention: Richard Wootton, City of Cape Town, Private Bag X9181, Cape Town, 8000.