Mayor Helen Zille will today reveal an “innovative plan” proposed by banking group Investec that will enable her to overcome the R180m shortfall in the financing for the new Green Point Fifa World Cup 2010 stadium.
Zille confirmed on Tuesday that Investec’s proposal would free her to sign the contract on behalf of the council to start construction of the R1,9bn stadium before the end of the month, the final deadline set by Fifa’s local organising committee for work on the stadium to commence.
Zille said she would release the new plan to the mayoral committee meeting of Cape Town’s council, led by the Democratic Alliance (DA), today.
She said the latest glitch over the shortfall in financing had resulted in her having to call off a council meeting last week that was to have considered finalisation of the contract.
“Investec’s plan will allow me to go ahead and sign the contract without breaking the Municipal Finance Management Act,” said the mayor yesterday. The act prevents municipalities from entering into contracts without sufficient funds being available for projects.
Zille told a breakfast debate organised by the Cape Town Partnership between her and Western Cape premier Ebrahim Rasool that she could not “bankrupt the city”, nor could she, in terms of the law, sign deals “if I don’t have money to pay”. She said she had wanted the national treasury to assist the council, but they said they had “reached their ceiling”.
“I made it clear to them we had also reached our ceiling, and seeing they had entered into a contract with Fifa for the World Cup, they couldn’t just wash hands and walk away, especially as they had insisted at national level that the stadium would be built at Green Point, despite the fact that the bid book said something different.”
Zille said the council had hit a “brick wall” last week and the meeting had been cancelled because “we could not go-ahead and pass a budget we would not be able to fund”.
Zille said she then contacted Investec. “They came forward with some very good ideas and looked at the constraints and with extraordinary agility found ways around them,” said Zille.
Rasool said the fact that the shortfall had been whittled down to R180m from R2,7bn was a “tribute” to the fact that there had been enough grounds for co- operation between the African National Congress-controlled provincial government and the DA-controlled city council.
“The past year has been an experiment in working together in some of the most hostile political terrain available,” said Rasool.
He said the city and province had been able to resist the temptation to enter “a destructive political terrain”, and the province and the business community would “judge us harshly if squabbles around the building of the stadium result in one of the major opportunities for Cape Town and Western Cape being lost”.
Rasool said he viewed the building of the stadium as the “cheese in the trap” for additional investment and that the investment could buy at least R15bn in related public and private investment, “which could go up to R21bn by 2010”.