Wednesday, January 03, 2007

World Cup 2010 cost explosion

More bad news for South Africa's World Cup construction as the Durban municipality has delayed signing a contract for a new soccer stadium to be used for the 2010 finals.

Work on the King Senzangakhone stadium was suppose to start late this month, however, rising costs due to a scarcity of building materials has delayed such a move. Local officials say they are waiting to hear from the national government to see if they will cover the increased cost.

Rumors say the cost of this one stadium has increased to over 2 billion rand ($286.2 million), which brings up the over all mater of increased stadium costs.

Originally, the government had said they would spend 5.6 billion rand ($801.2 million) on the new 5 stadiums, but when the actual numbers were released, the cost was 8.8 billion rand ($1.26 billion). Now it looks like costs will increase from that figure due to the lack of building materials.

Then there is also the issue of the five stadiums that will only be upgraded. The government had promised 1.95 billion rand ($279 million), but the upgrade to the Johannesburg Soccer City stadium alone will eat up 1.2 billion ($172 million) of that, not taking into account this serge in building costs. That leaves very little for the other four stadiums.

With the clock starting to tick, it looks like South Africa has very few options available. They need to get the building started, which means they will need to increase the amount of money budgeted or find some new way of getting outside interests to finance this undertaking.

South Africa could host a wonderful final, however with the price tag increasing, many may wonder if it is really worth it. Will these stadiums just sit empty in the years that follow or will the increased infrastructure bring about a boom for the country? These questions are what the government needs to answer, while we all wait for their answers.

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