2010 Agreements with Municipalities: briefing

SPORT AND RECREATION AND PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEES
6 June 2006
2010 AGREEMENTS WITH MUNICIPALITIES: BRIEFING

Chairpersons: Mr B Komphela (ANC) and Mr S Tsenoli (ANC)

Documents handed out:
None

SUMMARY

The purpose of the meeting was to share information between the two Committees on agreements for the 2010 Soccer World Cup. Three types of agreement existed. The first level agreement was the government guarantee signed by the President.  The second level agreements were between FIFA and the host cities, and the third level agreements with the stadiums involved.  The host city agreements had some room for renegotiation but were subject to confidentiality agreements.  Funds for infrastructure would be furnished through the Municipal Infrastructure Grant in the Department of Provincial and Local Government’s budget. The long-term viability of these projects was emphasised.

Members focused on the fact that host cities should cater for large numbers of supporters, many of whom would not be attending matches personally.  Public viewing areas should be set up to exploit this market.  Comprehensive programmes to entertain visitors should be designed and co-operation between various state departments was needed.

MINUTES

Mr Komphela (Chairperson: Sport and Recreation) said that the purpose of the meeting was to solicit assistance from and to give information to the Provincial and Local Government Committee on signed contracts for the 2010 Soccer World Cup.  They had requested the presence of Adv Petra Bouwer as he had been involved in the contractual process for the host cities in Germany.  The South African host cities had not been invited.  Only two, eThekwini and Johannesburg had requested assistance from the Minister of Provincial and Local Government in signing the host city contracts.  The Department of Provincial and Local Government (DPLG) would deal with the contracts.

He said that the President had signed the first contracts.  The second level contracts were those signed by the host cities.  A uniform approach was needed.  There were still questions of ownership of stadiums such as the FNB Stadium.  The Department of Public Works was one member of a syndicate which owned FNB Stadium.  A relationship was needed between government and private stadium owners.

Mr Tsenoli said government had an oversight role in internal and external operations. 

Department of Provincial and Local Government presentation

Dr PJ Bouwer (Executive Manager: DPLG) said that some of the facts resided within the Department of Sport and Recreation (SRSA).  The whole bid was based on government guarantees which had been made on behalf of the country.  There was a challenge of co-ordination.  The guarantees would not all be executed by national government, but rather by provinces and more particularly the various host cities.

He sketched the existing structures.   The Local Co-ordinating Committee (LOC) was chaired by the Deputy Minister of Finance, Mr J Maluketi which co-ordinated all activities.  SRSA had established a 2010 unit which was in charge of the operations side from a government perspective.  Finally there was the DPLG, which would focus on the execution of the bulk of guarantees by the host cities.

Host cities and the stadiums had been identified quite late at the start of 2006.  The host cities were Cape Town, Pretoria, Durban, Bloemfontein, Nelspruit, Polokwane, Rustenburg, Johannesburg and Port Elizabeth.  Each had been required to sign a host city contract on a “take it or leave it” basis.  He thought that they had all been signed.  Many of the terms in the contracts had been framed in an undetermined fashion.  It was up to each host city to consider the impact and renegotiate the ambit of the contract.  For example, the host city would be responsible for dressing the city with flags, banners etc.  This would be an expensive process, but each city would be able to renegotiate the exact definition of dressing.  DPLG would look at the implementation plans and responsibility definitions.

The third level of contracting was with the stadiums themselves.  These were not necessarily all government property.  There were issues involved such as compensation for the removal of existing branding for the duration of the tournament.  SRSA was responsible for the enabling legislation.  The first priority for the Sport and Recreation Committee would be the urgent matter of having this legislation in place by August or September 2006.

Dr Bouwer said that DPLG had a dual role.  The Municipal Infrastructure Grant (MIG) was on its budget, and this would be the funding source for capital expenditure.  The Department would give constant support to the host cities, as this was a constitutional requirement.  This would be done either through SRSA’s 2010 Unit, or through Project Consolidate.

Another aspect for the host cities to consider was the question of supporters.  He said that there was a difference between spectators and supporters.  Spectators were those in possession of a ticket.  The projections for the 2006 World Cup in Germany suggested there would be approximately one million spectators but as many as three million supporters.  It would be up to the host cities to cater for the two million supporters who would not be attending matches, and for those spectators not attending a given match.  The German answer was to arrange FanFests, where a big screen facility was provided and supporters could take part in all the hype surrounding a match.  This was a chance for the local authority to generate some revenue, and he saw huge potential in this for South Africa.  The challenge would be the venue selection.  In Pretoria, the Union Building gardens might be appropriate, the Waterfront or Grand Parade in Cape Town and the Loch Logan area in Bloemfontein.  Other cities would have to find suitable venues.

Discussion

Mr Tsenoli raised the issue of government guarantees and the nature of the host city contracts and their implications.  He asked if Dr Bouwer was aware of any interaction between the host cities to date.

Mr C Frolick (ANC) said that the host cities had not been appointed by government, but had been selected.  He asked if they were aware of the obligations when they had put themselves forward.

Dr Bouwer replied that the questions had been partly answered already.  The cities had made their bids. The guarantees were studied at the time, but the contracts had not been available.  There had been meetings since the announcement of the host cities.  Durban and Johannesburg were working together.  The cities would have to negotiate with the relevant spheres of government in order to meet their obligations.  For example, roads would have to be closed.  It was not within the competency of the cities to make such decisions.  They had been aware of the basic thrust of the agreements at the time of the bidding process, but not the finer detail.  The contents of the contracts were confidential.

Mr Tsenoli said he had also questioned whether the cities had entered into the hosting agreements blindfolded.  There had been rumours of the contents of these contracts.  He asked how the cities would get to grips with the post 2010 period, and perhaps even during 2010 as there could be a lack of capacity.  Meaningful discussions were needed within the parameters of confidentiality.

Mr Komphela said that a meeting was needed between his Committee and the host cities.  They could present the highlights of their contracts in a “sensitive” way.  These contracts had been signed in good faith.  The Committees had to have insight into the contracts before meeting the host cities.

Mr Frolick noted that the 2006 World Cup would kick off that weekend, and they should not now be stealing Germany’s thunder.  This would not be the first major event to be staged in South Africa, but none presented thus far was near the magnitude of the Football World Cup.  There had been ambush marketing issues at previous events, so this would not be a unique situation.  He asked how different the requirements would be compared to those of the 2003 Cricket World Cup.  For example, then there had been dedicated lanes on the roads approaching the venues.  He asked if DPLG was involved.

Mr Tsenoli said that Dr Bouwer was being placed in a difficult corner.  It was a constitutional imperative that dealings should be as transparent as possible.  The Constitution defined relationships.  The confidentiality of the contracts was perhaps justifiable; however sufficient information was needed to determine if the risks were justified in respect of the likely consequences.  This information was needed from the host cities and the 2010 Unit.

Dr Bouwer said he was a proud South African.  He noted that SA had achieved better marks than Germany regarding infrastructure.  Some fine-tuning was needed.  Firstly, he said that soccer was a world sports event, and previous World Cups in different codes could not equate to the number of supporters expected.  Secondly, there was a difference in the frequency of matches.  These would be daily for a month, and these would have to be integrated with the daily lives of citizens living around the venues.

Dr Bouwer said that the confidentiality agreements were in place.  A public relations exercise was needed.  Businesses might have to be closed on match days due to the crowds, and people would have to be informed.  The host cities had slightly different responsibilities regarding the private stadiums; therefore they would be responsible for their management.  The guarantees summarised the agreements such as the accreditation of medical personnel and of those medicines being brought into the country.

Dr Bouwer agreed that transparency would be of the utmost importance.  The pride of the country would be at stake.  The event would kickstart the development of infrastructure.  Athens had benefited by an upgraded airport and railway system thanks to the 2004 Olympics.  He said that reference to the 2010 World Cup was not actually allowed until the end of the current World Cup in Germany.

Mr Tsenoli said that everybody was already talking about 2010.

Mr M Nonkonyana (ANC) thanked the Department for the briefing.  He asked which law was applicable to the confidentiality clause, as the Access to Information Act promoted “free” access to information.  On the issue of stadiums, he noted that government would be investing in stadiums although some of them were privately owned.  Trust would be needed.  He asked who the major stakeholders were. He also asked what would be happening with practice venues.  He like the idea of the FanFests, but wondered if anything would be done in the rural areas.  He asked about the legacy of 2010, mentioning the example of the stadium in Umtata which had been torn down.

Dr Bouwer said that confidentiality had been written into the contracts.  The contracts between the International Federation of Football Associations (FIFA) and the host cities fell under Swiss law, as was the case with the Olympics.  The general laws regarding issues such as trademarks would be in terms of South African law.  The Access to Information Act made provision for a third party to provide grounds for exclusion.  The practice venues would be a golden opportunity for the peripheral municipalities to get involved.  He mentioned the example of a town in Germany, not one of the host cities, which had arranged its own festival to coincide with the World Cup, and was making “heaps of money”. In terms of the legacy issue, the LOC CEO Mr Danny Jordaan had said that every development must be sustainable in the long term.  Plans were being made for 2013 and beyond, and the MIG was already involved.

Mr Tsenoli said that Finance Minister Manuel was receiving plenty of funds from offshore investments which were now being declared for income tax purposes.  The stadium at Umtata might be a beneficiary of this revenue collection.  He would also like to see the cities attending a joint meeting of the two Committees. They could then visit and interact with both political and sports leaders.  Disaster management issues would have to be discussed given the huge crowds that would be expected.  His advice to the municipalities would be to stretch the boundaries of the contracts so that they could extract as much as possible.

Mr Frolick said that the legacy aspect was an important part of the long-term project.  He quoted the example of a R6 million facility which had been part of the legacy programme for Cricket World Cup 2003, but was now to be demolished.  This facility was in one of the football host cities.  He was referring to a stadium in Khayelitsha, Cape Town.

Mr Komphela said that there were a number of things which indicated the value of interaction.  The Safety at Stadiums Bill would take about two years to be finalised.  Adv Gideon Boshoff had shown how this related to disaster management.  It should not be necessary to repeat provisions. 

Mr Komphela said there should be a process of internalising the tournament to those who would not be able to reach the stadiums during the World Cup.  During a visit to France they had seen how scholars were invited to visit the stadium during its construction; encouraging a feeling of ownership.  This was a good model and should be followed in South Africa.

Mr Khompela added that communication was needed to address the high expectations.  Public viewing places were needed.  He saw the need to meet with the Portfolio Committees on Communications and Transport.  It could be expected that the English team would bring some ten thousand supporters, only one thousand of whom would be attending matches.  The host city would have to manage the balance of the supporters.  The Portfolio Committee on Arts and Culture should also be involved.  This would be a chance to promote South African arts and culture.  Events such as the Klein Karoo Kunstefees could be used to showcase this.  A programme spanning all government departments was needed.  Members of Parliament would be the best placed persons to communicate developments

Mr Khompela felt it would be a different country after 2010.  After the Commonwealth Games, several athletes had decided to seek asylum in Australia.  The same might happen after 2010 and the Department of Home Affairs would have to be vigilant.  In contrast, Germany would have the ability to track all the visitors at the 2006 World Cup.  He said it would be a world class World Cup.

Mr E Saloojee (ANC) questioned the surrounds of the FNB Stadium in Johannesburg.  Hillbrow and the inner city were nearby, but this area was deteriorating badly with a high crime rate.  Safety of visitors would be a critical issue.  The rejuvenation of the city would be a massive task.  He asked if this was being addressed.

Mr Tsenoli said that Mr Saloojee’s question was a perfect one for Johannesburg leadership to answer.  The results of the discussions should be shared with the Committees.  The Department of Environmental and Tourism Affairs should also be addressing this issue through the Healthy Cities campaign.  The bodies running programmes should also communicate with MPs as information was needed for constituency work, and to avoid legal potholes.

Mr Komphela said that some questions needed to be sorted out by the LOC.  Co-operation was needed with municipalities.  The question of crime was important, but he said he had been warned of criminal areas in Germany, while there were also no-go areas due to pockets of racism even worse than in South Africa.

The meeting was adjourned.