CITICHAT 3/2007 - 26 January 2007
2010 – rising cost and ever decreasing time!
Up front let me state that I am an ardent 2010 supporter! I have seen what such major events can do for a city and I say, bring ‘em on! I think it will be a great event for South Africa and for Jozi. The benefits to the metropole will be in realizing both new and enhanced infrastructure and the fact that the event will act as a catalyst to get new projects implemented plus those that have been languishing on the drawing board for years. I must admit, however, at experiencing growing concerns regarding our tardiness in preparing for the event leaving a relatively short period to do a mountain of work and, lately on the reported cost overruns for many of the stadia.
For example, the headline of the Business Day of 24th January trumpeted “Cities warn of rocketing costs of 2010 stadiums.” The body of the story states that “it emerged in public hearings of Parliament’s sport and recreation committee yesterday that most of the host cities were experiencing shortfalls due to expenditure estimates that had grown because of inflation, the exchange rate and rising input costs.” (My underlining). I don’t buy that – when the estimates were prepared they must have known that the projects wouldn’t start before the beginning of this year and the end date was certainly known – any estimator worth his or her salt would have made a reasonable provision for all these aspects. We have lived in an inflationary environment for years – we’ve known that the stadia are going to be built in a time of extreme shortages and an overheated construction industry – all such issues could and should have been provided for. Whilst fluctuating exchange rates are impossible to forsee, the proportion of imported materials surely isn’t that great.
According to the report, Cape Town had budgeted on R2.5 billion but the preferred bidder “had placed the cost at R3.7bn”. Durban is facing a funding gap of R600 million, Nelson Mandela of R262 million and Polokwane R300 million. AND THE CONTRACTS HAVEN”T STARTED YET!
We of course have chosen to forget that the total originally budgeted for all stadiums, new and upgraded, on which we won the bid, was only R2 billion. Now, before construction starts, it’s R9 billion which looks as though it is far short of what the eventual costs will be. Admittedly, the real long-term benefit to the country will be that soccer facilities, historically sub-par as a result of apartheid and always the poor relation to other sports, will now be as good as anything the rest of the world has to offer. However, I wonder who has done the maintenance sums? We always seem to find it easier to splurge capital than make allowance for adequate ongoing upkeep.
But back to Jozi - this past week the Executive Mayor is reported to have announced that the refurbishment of the impressive calabash-shell design of the FNB stadium “would be completed seven months ahead of schedule”. Optimism, realism or hope? Evidently the contract was due to have been completed by October 2009 and now will be finished by “March the 18th”. Precise time estimation that! With the contract officially due to commence on the 1st Feb 2007 that means that the contract period will be 25-and-a-half months. The contract price of R1.5 billion calls for an average monthly turnover of R60 million! That is extraordinary! That is astonishing! That is unbelievable! That’s about R85 000.00 per hour to be spent every hour of a 24 hour day and every day of a 30 day month for two-and-a-bit years! Whew! One can only assume that the structural steel framework to be built around the stadium, its ‘calabash’ covering and the roof construction and covering are all extremely quick to erect yet incredibly expensive.
The R9 billion allocated for stadia will mean a monthly turnover of in excess of R300 million a month to be completed by 2009 – at the same time billions of rand of expenditure will be poured into transportation and other infrastructure and none of this takes into account construction costs of Gautrain – looks like a good time to buy Construction sector shares!
I wasn’t able to find out the original contract price of the FNB Stadium, but Ellis Park, built 1981/2 cost R53 million. Allowing for inflation (per Statistics SA figures) that R53 million would be about R650 million at today’s costs. With
60 000 seats, the cost per seat would be about R11 000.00. The 24 000 extra seats at Soccer City will be costing about R63 000.00 per seat! I know that I’ve done a simplistic calculation, if one adjusts for the external cladding and roof, the cost per seat will be substantially reduced, but I doubt by six times!
Cape Town’s 68 000 seats will cost a whopping R3,7 billion but ‘only’ R55 000.00 per seat, Durban’s fancy King Senzangakhona Stadium will provide 70 000 seats, the original estimate was R1,6 billion now looking at R2,2 billion which will mean about R32 000.00 per seat.
I looked at some reasonably recently built stadiums in the UK for comparison purposes – would have been more pertinent to examine those built in Germany for last year’s World Cup but I couldn’t find the data. The Millenium Stadium in Cardiff cost R1,8 billion in 1999 – that would be R2.5 billion today based on our inflation figures– with 74 500 seats that equates to R35 000 a seat which including the cost of an elaborate sliding roof. Max Boyce, the Welsh comedian and Welsh rugby aficionado explains the reason for their sliding roof:
They say it has a sliding roof,
That they can slide all day.
We’ll slide it back when Wales attack,
So God can watch us play!
Wembley Stadium, billed as the most expensive stadium ever built and as yet unfinished, was a fixed price contract of 757 million pounds sterling which equates to a cost of nearly R120 000-00 per seat. They broke ground in 2002 and it was due for completion in autumn 2005 - then the end of January 2006, then March 2006 and now the gates will open for the first event on the 3rd March 2007. Clearly the Brits need South African contractors rather than the Australian company, Multiplex, that they awarded the contract to.
From an inner city point of view, this is probably quite academic – Soccer City is of no direct benefit to us. So where will the inner city really benefit and where are we in regard to progress?
According to media reports “some of the legacy projects include the replacement of public utilities such as outdoor refuse bins, benches, vendor stalls, play areas, pathways and ablution facilities.” It’s not clear from the report if this would be throughout the inner city or specifically focused on the precincts around Soccer City and Ellis Park. In regard to Ellis Park, most of these items were newly installed for the All-Africa games held in September 1999. Since then, zero maintenance (which we clearly prefer to zero tolerance) has resulted in all these amenities being almost totally destroyed – again I hope someone out there isn’t just allowing capital budgets to be formulated without an adequate management and maintenance allowance this time around!
Apart from work that has been in progress for some time in Nasrec around Soccer City, physical work on the Ellis Park precinct has already started through contracts awarded late last year for the creation of a 'Gateway' into the precinct at the intersection of Charlton Terrace and Stiemert Road and another for the upgrading of both Stiemert Road and Sivewright Avenue. So those aspects appear to be well ahead of programme.
Last evening’s Star reported on the sparkling mosaic work that is underway on the columns supporting the overhead highway in Saratoga Avenue near Ellis Park. Overhead highways are always oppressive for those who pass below them and, with this being one of the gateways to Ellis Park, what a great idea it is to use artwork to lighten up the scene.
A huge amount of investigation has been done in regard to upgrading the Greater Ellis Park area particularly related to the problem of slum conditions in places like Bertrams and Doornfontein but no definitive direction or approach has yet emerged.
To me, the real benefit for the Inner City will flow from the proposed public transportation initiative. I included an overview of what is planned two weeks ago in Citichat 1/2007. Briefly, it will see the introduction of a R2 billon integrated Bus Rapid Transit (BRT) System providing
• Exclusive right-of-way lanes
• Rapid boarding and alighting
• Pre-board fare collection and fare verification
• Enclosed stations that are safe and comfortable
• Clear route maps. Signage and information displays
• Automatic vehicle location technology
• Modal integration at stations and terminals
• Bus operators contracted to provide the services
Integrated into the BRT will be the Inner City Distribution System (ICDS) which will provide a cheap fare for an interlinked series of routes that will take you from the Ellis Park precinct to Newtown as well as north/south connections. In addition, an international Transit & Shopping Centre is being planned for the Park Station Precinct that will provide all the necessary connections between the Gautrain Station, Park Station, Metro Mall, Jack Mincer and Noord Street Long Distance Taxi Ranking.
Already approved by the Council, construction is due to start in the latter part of this year - the buses are planned to be in service before April 2009 providing a year of testing and bedding down before the first ball is kicked off. That timetable looks extremely tight to me.
If I was Mayor, I’d employ the best project management consulting firm in the world to check every 2010 construction programme and resource projection for every project and have them report progress to me on a daily basis. Rather like Rudi Guilliani who had daily crime incidents reported to him during his crime zero-tolerance programme. Mmm, maybe that’s not a bad idea either!
To end on a light note – the www.southafrica.info/2010/ records the most frequently asked questions regarding 2010:-
Where is South Africa?
What’s the beer like?
Are there lions in the streets?
Should be great fun, cheers, neil
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