14 March 2017

South Africa: Minister Fikile Mbalula - Response On Announcement By Commonwealth Games Federations

Photo: LOC
Durban's Moses Mabhida Stadium (file photo).
press release

The Minister of Sport and Recreation South Africa, Mr. Fikile Mbalula MP, statement on the recent reported announcement by the Commonwealth Games Federations

The South African Government has regrettably noted the statement issued by the Commonwealth Games Federation on the 13 March 2017. We wish to state that while we disagree with the contents of the statement we respect the decision of the CGF as the right holder and wish to retrace our footsteps leading us to this point.

The Commonwealth Games Federation at their General Assembly meeting in October 2016 resolved to support South Africa to achieve a satisfactory resolution of all outstanding matters in order for Durban to continue with the hosting of the Commonwealth Games 2022. South Africa was therefore required to provide a response by 30 November 2016 on how the outstanding issues will be resolved, failing which the Executive Board was empowered to look at an alternative host city. South Africa duly provided feedback on the outstanding matters with supporting documents, timeously and eagerly awaited feedback from the Commonwealth Games Federation.

The Government of the Republic of South Africa wishes to express its disappointment at the announcement by the Commonwealth Games Federation to withdraw the country's bid to host a successful Commonwealth Games in Durban 2022 this, despite all the efforts and the positive responses from the Commonwealth Games Evaluation Commission on the potential capacity of the Host City of Durban.

Our milestones regarding all efforts made in hosting a successful bid are therefore as follows:

South Africa communicated its expression of interest to host the Commonwealth Games 2022 by the 31 March 2014 and the official intention to bid took place on 22 July 2014 in Glasgow. Edmonton and Durban were the only two candidate cities bidding for the Commonwealth Games in 2022 Games.

The Cabinet endorsed the intention by the City of Durban to bid to host the Commonwealth Games in 2022 and directed SRSA to establish a Bid Committee to develop the bid proposals to host the Commonwealth Games. Cabinet further directed SRSA and the National Treasury to consider the business plans, the proposed budget and funding model and revert to Cabinet before the announcement of the host cities.

In Feb 2015 the Canadian city of Edmonton, the only other contender bidding to host the Commonwealth Games in 2022, withdrew its bid to host. This now left South Africa and the City of Durban as the only City bidding to host the Commonwealth Games in 2022.

It must be emphasised that it was not a fait accompli that South Africa will automatically be awarded the bid. South Africa still had to undergo the arduous process of securing the guarantees, finalise and lodge the bid documents as per the templates provided by the Commonwealth Games Federation,, prepare for the visit and interaction by a high powered Commonwealth Games Federation delegation as well as events specialists who formed part of the Games Evaluation Commission and the inbound inspection teams of the various Continental Commonwealth Games countries and still secure the bid through the voting process of the General Assembly which was held in Auckland in September 2015. All this, after securing the Cabinet approval a based on funding guarantee of R 4.32bn.

It must be noted that when the Games were awarded to South Africa, South Africa had not signed the host city agreement. Clauses in the agreement were seriously going to compromise South Africa and Government was not prepared to sign an open ended guarantee that indicated as follows:

"The Government will meet any potential shortfall in the budget for the Organising Committee (OC) arising from the preparations for and the hosting of the 2022 Commonwealth Games." And "the Government also guarantees subsidies or rental costs related to the Commonwealth Games Village."

Due to the above requirement, the Finance Guarantee was delayed but was signed in June 2016.

The Minister of Finance signed the guarantee in respect of the operational budget of R2.662 928 000.00 (2 billion, 6 hundred and sixty million 9 hundred and twenty eight thousand rands) and a contingency budget which is capped at 18% R479 million , three hundred and twenty seven thousand and 40 rands )

The financial guarantee was also subject to the willingness of the CGF to constructively engage with South Africa and Durban on all possible revenue sharing streams related to the games including amongst other things, ticketing, merchandising and broadcast rights.

Having learnt lessons from other events, the South African Government had no appetite to issue an open ended guarantee including having to transfer a large portion of funds to a newly established private entity.

The expectation that the South African Government will have to provide more than what cabinet had approved could not be sustained in the current economic environment.

South Africa successfully hosted The All Africa Games in 1999 with a budget of two hundred and fifty-two million rands, should it be compounded at 6% per annum over a period of twenty-one years it will amount to R808 200 000.00 million in 2022. The actual cost of the games is an illustration that a multi coded sport event can be successfully hosted within an affordable budget. The 1999 All Africa Games are comparable in size, the number of athletes, the number of technical officials and the duration to the planned Commonwealth Games of 2022. Utilizing the All Africa Games as a bench mark, we can state that the R4,32 Billion approved by Cabinet is more than sufficient to deliver world Class Commonwealth Games in our own projections.

The Table below clearly shows this comparison.

Table 1

Indicator

All Africa Games 1999

Commonwealth Games 2022

Countries

53

71 *

Athletes

4 200

4 500

Officials

1 800

2 000

Duration

10 days

14 days

Budget

R808 200 000.00 million *

R4, 320, 000, 000.00 billion

* The 71 includes the Commonwealth territories which are not recognized as countries in their own right by the United Nations Charter. Strictly speaking the numbers of countries are comparable to those on the African continent.

* Compounded at 6 percent year on year on the original budget of R252, 000, 000

Having noted the challenge related to the differences of approach in the delivery methodology for the Games and the approved budget by the South African Government, it then became apparent that all other necessary timelines will not be met until clarification and consensus has been achieved on the budget and the delivery model.

Another key milestone included the payment of the host city fee which was not effected.

The establishment of the Organising Committee was also delayed until finalisation of the budget and the delivery model.

As the three spheres of Government and the sports movement, we entered the Bidding process for the City of Durban to host the Commonwealth Games 2022 on behalf of our country and for the first time on the African Continent. However, at this juncture, our country is regrettably not in a position to make huge financial commitments given the current competing socio-economic needs and global economic down turn. In the interests of fiscal discipline and financial prudency, our government has considered all options and remains confident that we have acted in the best interest of South Africa.

We end by thanking all the political principals and officials from all spheres of Government who worked tirelessly to secure the games.

We in the same vain express our gratitude to the South African Confederation and Olympics Committee (SASCOC) for their collegiality.

A word of gratitude to the Commonwealth Games Federations for believing in our BID and having initially entrusted the City of Durban to host the Games.

We trust that history will present us and future generations with another opportunity to host the Commonwealth Games and other international sport events. Our Bidding and Hosting Strategy remains focused on us attracting premier events that add value to our economic and social cohesion imperatives. South Africa remains a premier destination for such mega sporting events and our solid infrastructure holds the country in good stead to host same.

Issued by: Sport and Recreation South Africa

More on This

Explainer - How Durban Lost the 2022 Commonwealth Games

Durban lost the right to host the 2022 Commonwealth Games on Monday. In a way, it wasn't really a surprise. Signs have… Read more »

Copyright © 2017 Government of South Africa. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 800 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.