New South African Review 1 - Anthony Butler

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      Two additional problems with the Grant Thornton estimations are first, the anticipated fiscal and employment contributions of the World Cup, and second, the projected tournament tourist visitation. In an earlier critique, Bohlmann (2006) cautioned that the impact and employment multipliers used by Grant Thornton tended to be over-optimistic in comparison with other impact studies carried out for similar events. It was also not specified in the Grant Thornton studies whether the projected employment stimulated by the tournament would be long- or short-term or how the jobs would be affected by seasonal variation in demand. From other studies it has been shown that, while revenues may increase in specific sectors (such as accommodation) for the short period during which a tournament takes place, wages remain the same or – since there is often a sharp rise in casual employment in that time – may fall. Employment multipliers used in many ex ante studies often do not take these processes into account and therefore tend to be exaggerated (Matheson 2008). No comprehensive study has yet been done on the leakage and income attrition effects of construction for the 2010 tournament on the national economy. Notably, however, early post-event assessments suggest that employment in the construction sector fell sharply – by more than 10 per cent – after the completion of World Cup infrastructure (Sapa 22 June 2010).

      Finally, there was to be much dispute about whether the 2010 World Cup would draw the numbers of tourists estimated by South Africa’s tourism authorities (see for example Cornelissen 2009b). By the close of the tournament, over one million foreigners had visited South Africa during the four-week period, representing a year-on-year increase of 25 per cent (or 200 000) additional tourists, but still significantly short of the close to half-million foreign visitors initially projected. No systematic study was conducted by the authorities that profiled World Cup visitors in terms of football spectators’ specific travel habits, nor did broad projections of expected tourist arrivals take possible displacement or crowding-out effects adequately into account.

      In expectation of the World Cup’s projected economic effects, the national government undertook to spend more than R400bn over the four-year period between 2006 and 2010, as part of a much larger capital investments programme to develop infrastructure, upgrade ports of entry, roads and railway lines and secure the provision of energy (Manuel 2007; and see table 2). At the end of the tournament, public investments stood at around R600bn. Although only R21.6bn of this (R11.8bn for the development of transport and other infrastructure and R9.9bn for the construction and improvement of the competition venues) was regarded by the government as its direct expenditure on the World Cup, it should be kept in mind that these investments would not have been made in the absence of the tournament. As such, the R600bn should properly be viewed as part of the World Cup expenditure legacy.

World Cup specific spending Value
Infrastructure
Stadium upgrades and construction R8.4bn
Transport and other infrastructure R9bn
Non-infrastructure investments
Volunteer, social/community development & sport development R379m
World Cup opening & closing ceremonies R150m
Security surveillance & deployment/training of security personnel R666m
Upgrade of telecommunications & improvement of emergency medical services Unspecified
Capital investments not directly related to the 2010 World Cup
comprising construction and upgrade of national road networks; airports; harbours; energy supply R400bn+
Source: Manuel 2007 & www.sa2010.gov.za/en/funding.

      The positive aspect of this is that, as part of World Cup preparations, public investment was made on much needed infrastructural programmes. A significant portion of the R400bn+, for instance, was dedicated to the upgrade of South Africa’s dated road network (of which the South African National Roads Agency was the principal beneficiary) and the improvement of public transport. Other investments concerned the extensive upgrading of all international and some regional airports (which tally in excess of R19bn). Yet these investments constituted approximately one-tenth of South Africa’s annual gross domestic product (estimated at purchasing power parity), and represent, over the longer term, a substantially higher cost for the tournament than what was spent by the German authorities for the 2006 World Cup (approximately R72bn). By way of further comparison, the 2008 Beijing Olympic Games cost about R196bn and was the most expensive Summer Games ever hosted in the history of the modern Olympics.

      While the intention of South Africa’s authorities therefore was to use the 2010 World Cup to stimulate new large-scale developments in the country, it came at a prohibitive cost, and was made without guarantee that the tournament would deliver on many of the projected economic spin-offs.

      Infrastructural and urban costs, impacts and legacies

      While the national government was the principal shareholder and investor in the World Cup preparations, provincial and urban authorities also held major stakes in the tournament. Indeed, many of the costs for stadium upgrades and World Cup specific transport were borne by host cities and their provincial governments.

      For the 2010 World Cup much emphasis was placed on the timely development or preparation of three types of infrastructure: the competition venues and stadiums; transportation; and tourist accommodation. Of the ten stadiums that were used for World Cup matches, six were newly built or refurbished (in the host cities of Cape Town, Durban, Johannesburg (Soccer City stadium), Port Elizabeth, Nelspruit and Polokwane), while four existing stadiums – the majority of them rugby venues – were upgraded. The upgraded stadiums were located in the cities of Bloemfontein, Johannesburg (Ellis Park stadium), Pretoria and Rustenburg.

      Because stadiums are the singular ‘showpiece’ of mega-events, most hosts invest large volumes of resources in the construction and design of sites that are unique and could be used to support the brand – existing or new – of the city. In this way, although primary event infrastructure, stadiums could feed into the secondary legacies of mega-events. Nonetheless, there is much dispute among researchers about the potential positive and negative legacies of stadiums and event competition venues. There are many examples of underutilised or unused Olympic villages or stadiums across the world, with the worst examples probably being Montreal and various cities in Japan and South Korea. There has been a general move to avoid the construction of ‘white elephants,’ and international sports organisations such as the International Olympic Committee and the Commonwealth Games Federation have included a demonstrable postevent infrastructure legacy as a required section in bidding cities’ bid books (see Smith and Fox 2007). There is a general consensus among researchers that the best way to achieve this is through the development of multifunctional and multipurpose competition venues which help to stimulate

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