White Elephants and Wasted Millions: A Warning To the World Cup Hopefuls

Neal CollinsAnalyst INovember 12, 2010

End of business: Soccer City during the World Cup closing ceremony in July, 2010
End of business: Soccer City during the World Cup closing ceremony in July, 2010Cameron Spencer/Getty Images

You’d expect problems with pachyderms in South Africa, where elephants roam the game reserves in tree-chomping hordes. But since the World Cup, white elephants are the problem. A small herd of them.

Magnificent football stadiums lying empty and unused. And that’s just one aspect of the expensive legacy left by hosting the greatest footballing show on earth.

The 2010 World Cup hasn’t left South Africans trumpeting about positive fall-out and that strange parping noise isn’t the mating call of the vuvuzela... it’s the nervous response of the economists as the European superpowers line up in Zurich on Dec. 2 for the right to host the 2018 World Cup.

Russia, Spain, Holland/Belgium, Portugal/Spain and England, be afraid, be very afraid. South Africa went into this with their eyes open, determined to make a success of hosting the World Cup. They did. But boy, they’ve paid for it.

What was it British Prime Minister David Cameron said the other day? "I’m spending much more time on the World Cup than on the G20.” Perhaps he should rethink. And bribe those notoriously corruptible 24 FIFA executive committee members to give the tournament to Russia.

Way back in 2004, when FIFA awarded South Africa host status for 2010, consultants Grant Thornton suggested the Rainbow Nation would have to spend $300m on stadiums and infrastructure, while they predicted a gross domestic product boost of $2.9bn.

What? Soccer City, the largest white elephant of them all, cost more than $300m alone as the great kalabash emerged amid the mine dumps southwest of Johannesburg.

In the end, despite record profits for FIFA, South Africa spent $4bn to build and rebuild their 10 stadia and upgrade the infrastructure for what was, ultimately, a peaceful but mediocre World Cup.

Positive South Africans point to the upsurge in tourism, national pride, the lack of predicted bloodbaths and a brief downturn in crime.

But most, in the post-World Cup depression, accept their country may have been fooled into thinking a month under the global spotlight would right the nation’s many ills. It hasn’t.

Those 10 sparkling stadiums lie largely unused. They’re using Cape Town’s Green Point for next week’s Mandela Challenge which sees South Africa take on the USA. Both SAFA (R5m) and the local municipality (R2m) are forking out millions to allow the game to go ahead.

In Polokwane, the new Peter Mokabe stadium, capacity 45,000, sits unused next to erm, the old Peter Mokabe stadium, capacity 20,000, which was quite suitable for South Africa’s northernmost city. In rural Nelspruit, the Mbombela Stadium has no suitors. Neither city has a side in the local Premier League.

In Johannesburg, Soccer City is desperately trying to attract big rugby showdowns while the arched Moses Mabhida in Durban hopes to host international cricket fixtures to help pay the costs of upkeep.

The coastal city will also bid for the 2020 Olympics in a desperate effort to make their magnificent 65,000-capacity stadium reusable, given its position right over the road from the 55,000-capacity Kings Park rugby stadium.

Horatio Motjuwadi, editor of The Sowetan newspaper, is as worried as anybody by the annual R2m cost of maintaining each World Cup stadium.

He said: “I don’t know how they’re going to keep going. You need a mathematician to figure out how they are going to move forward and pay for them after the World Cup.”

Eddie Cottle, World Cup spokesman for lobby group Labour Research Service, says: "FIFA made the most money ever of any country hosting the World Cup. So there is a big question being asked right now in South Africa: Where is the money going and who will really benefit from the World Cup?

"As we can see it, the people who have made the most out of the World Cup are the construction companies, FIFA and its partners."

The original plan foresaw some 400,000 visitors to the soccer tournament, spending around R15bn (1.5bn euros) in the country. That revenue was expected to largely offset the infrastructure costs estimated at about 1.7 euros.

Ultimately though, South African taxpayers face a bill of more than 3.3bn euros. Roughly the same amount FIFA expects to post as its net earnings from the event: one of the most profitable of all time.

On the positive side, Marc Hershowitz, formerly of the University of Cape Town Unilever Institute of Strategic Marketing, argues: “FIFA commissioned a six-wave study of South African residents post World Cup and the findings were glowing. The study showed a marked upswing in national confidence, both local and abroad.

"And of the 75 percent of all visitors who toured South Africa for the first time, 83 percent stated their intention to return and a staggering 94 percent expressed they would gladly recommend South Africa to friends and family.”

But that simply doesn’t make up for what South Africa spent to host FIFA’s most lucrative World Cup.

Remember, South Africa remains a developing country. Unemployment stands at 40 percent. The Gini coefficient of income inequality, has risen from 0.66 in 1993 to 0.70 in 2008.

And who’s up next? Brazil, another land of haves and have nots. In 2014, 12 cities will host World Cup games.  Four of these (Manaus, Brasilia, Cuiabá, Natal) haven’t got a club in Brazil’s top three divisions.

And the cost of building the stadiums there? $4bn, with historic stadiums already demolished without public consultation and communities facing forced removal around the grounds.

Just like they did in South Africa. Both nations have avoided the worst of the global economic downturn, but neither can afford to throw away money.

Can the Russians? The Dutch and Belgians? Economically wounded Spain and Portugal? Or cut-ravaged England? Hardly.