BuaNews (Tshwane)
Vivian Warby
30 November 2008
Cape Town — The consortium of Stade de France and South Africa's SAIL Group have been awarded the service contract to operate Green Point Stadium in Cape Town.
The City of Cape Town's Bid Adjudication Committee approved the award to the service contractor this week. The legal entity formed by the consortium is Business Venture Investments 1317 (Proprietary) Limited.
The consortium now has the responsibility on ensuring Green Point Stadium remains a sustainable multi-purpose venue after the 2010 FIFA World Cup.
Mike Marsden, Executive Director of Service Delivery Integration of the City of Cape Town, said the world-class, purpose-built stadium was getting a dedicated team with an international and local track record of experience and success to maximise the value, revenue and viability/sustainability of its stadium.
"Cape Town residents and visitors are getting a world-class facility which will host prime sports matches and spectacular events as well as gaining an upgraded sport and recreation precinct," said Mr Marsden.
The consortium will be expected to be involved in the management of the stadium from January 2009 and ensure the successful hosting of eight world cup matches there.
The city will pay the consortium to manage the stadium up to and during world cup as a 68 000-seater stadium. Thereafter the consortium will lease the stadium from the city for a period of not less than 10 years and not more than 30 years with review periods at certain points.
The city will receive 30 percent of Earnings before Tax (inclusive of municipal rates) on a fixed percentage basis. Thus, if the stadium becomes very successful, the city's returns rise significantly.
The approval of the lease of the stadium resides with council and will be considered on 3 December.
Once the world cup is over the stadium will be reduced to a 55 000 seat capacity, catering for all types of sports including rugby as well as music concerts, major events and spectaculars.
It will have, amongst others, corporate hospitality suites, medical, training, conferencing and banqueting facilities. The consortium will operate the stadium as well as manage and maintain the defined areas of the surrounding urban park and sport precinct on the 85 hectare Green Point Common from stadium revenue.
The in principle agreement provides for a detailed contract to be signed between the parties which will describe the roles and responsibilities of the city and the operator in terms of aspects such as maintenance, parking, informal trading, insurance for eventualities and sureties.
The operator has offered sureties totalling R10 million.
Stade de France is a successful and profitable 80 000-seater multi-purpose stadium in Paris, France that hosted the 1998 FIFA World Cup and the Rugby World Cup in 2007. SAIL is one of the largest sport marketing companies in South Africa.
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