S.Africa braces for soaring World Cup costs

Two years ahead of the 2010 World Cup, organisers in South Africa are facing soaring costs for building stadiums in addition to worries over xenophobic violence, power shortages and rampant crime.

Organising committee chief executive officer Danny Jordaan told Reuters he expected the final cost for the construction and renovation of 10 venues for the finals to finish well above the current budget of 9.8 billion rand ($1.24 billion).
“It will probably be over 10 billion rand,” Jordaan said, adding that the financing of the venues remained a challenge.

“We are dealing with now with final costs of the stadiums, which are soaring as a result of the downturn in the world economy and rising fuel prices,” he said.

Jordaan said there was still potential for cost overruns on some major remaining tenders by the cities hosting matches although 94 percent of items had been procured.

“We don’t know what the final impact of the economic downturn will be on our costs. It’s unfortunately a moving target,” he said.

South African inflation hit a 5-1/2 year high of 10.4 percent in April. Rising fuel prices and likely electricity price hikes to address a dire power crisis mean it could go higher.

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