South Africa’s bid to host the 2022 Commonwealth Games in Durban will be an expensive event that will be of no material benefit to the country
Nobody likes a wet blanket, or to have rain on their parade. But there was no shortage of negative blowback to Monday’s front page story in The Times. It was headlined, “R20-billion bonanza: That’s how much SA stands to gain from hosting Commonwealth Games.”
First out of the blocks on Durban’s sole bid to play home city for the 2022 event was the waspish Cape Town legal blogger, Pierre de Vos.
He tweeted in response: “And Father Christmas is bringing you a Porsche too…”
But you don’t need to be the “Grinch who stole Christmas” or, more seasonally, to play the “Bad Easter Bunny” to ask some hard questions and raise the proverbial red flag, or a few of them.
Last week the minister of finance tabled his maiden misery and austerity budget in parliament. There was far more red than black ink in it.
The fiscal deficit, the tax hikes raiding the increasingly threadbare pockets of the middle class, whopping increases in transfer duties on property and swingeing rises in the fuel levy made the Budget’ s meaning plain enough.
On the night of its presentation I was in attendance at a dinner hosted by one of our leading banks. With accuracy, its long-time CEO declared his verdict on it: “Under the circumstances, it wasn’t too bad and could have been worse.”
But somewhere buried in the detail, not of the speech but in the budget review of the national Treasury, should be the figure which Monday’s story did not provide, mainly because it has yet to be disclosed by the Durban Bid Committee.
How much is the South African taxpayer going to have to fork out for the Durban Games? You can bet your declining rand that the bid is not possible without a Treasury guarantee good enough to cover the entire cost of the games.
Here’s a clue: The 2014 Commonwealth Games cost the city of Glasgow (and the Scottish and British governments) around £575-million. In our shrinking currency that weighs in at a massive R10.33-billion. But who knows how much north of that figure the rand will be by 2022, unless we start doing the right things economically?
It is worth examining why the only other bid city pulled out of this contest and left the arena clear for Durban.
Edmonton in Western Canada has the second-largest, after Saudi Arabia, deposits of tar oil sands and is one of that sprawling country’s pre-eminent petrochemical hubs. But the declining price of oil meant its fiscal prudence kicked in and it surrendered any claim on hosting rights.
Since Edmonton would primarily have relied on its provincial government to pay its way, the bid committee chair withdrew when the Alberta province announced that it had a deficit of $7-billion (R82.3-billion) to plug, and the Games would have to be deferred to better economic times.
South Africa’s national budget or fiscal deficit is around $13.6-billion, but that’s for the whole country, and our provinces, unlike Canada’s, do not raise their own revenues. But then again the national economy of our country is around six times smaller than Canada’s.
So what does Canada, or the other 50 countries in the Commonwealth who passed on the chance to host the 2022 Games, know that we don’t?
This month, a book was published that provides a clue. Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup by Andrew Zimbalist is a cautionary tale with which many of our host cities of the 2010 Fifa World Cup here will relate. Basically for those two mega-events, the host cities and countries foot the bill and the lion’s share of costs are borne by them. But the profits fill the coffers of global organisations which hold the rights to the World Cup and the Olympics.
It would probably be more profitable for at least eight of our cities to blow up the stadiums they were obliged by Fifa to build for the 2010 football-fest than to maintain them at great cost to local ratepayers. But what Fifa wants, Fifa gets.
It might be that the Commonwealth Games committee is less rapacious and hopefully less corrupt than Fifa has proven to be.
Of course there is a counter argument beyond feel-good factors, tourism arrivals (alas negatived here by the new, quite crazy visa regime) and temporary employment. You only need to hop aboard the Gautrain in Johannesburg to see the add-on factor of a truly world-class legacy.
But South Africa kicks in a well-known home brew of its own. The Durban Bid Committee exults about a 1 750-unit athletes’ village and a new integrated rapid public transport network and other megabuck projects.
Way back in January 2007, when he was still ANC secretary-general, Kgalema Motlanthe warned of “the rot across the board, where every project is conceived because it offers certain people a chance to make money”.
Let’s hope this wasn’t the primary, or even a secondary, consideration behind the Durban bid.
This article originally appeared in The Times