Zille elated at Investec rescue plan for stadium

Posted On Friday, 09 March 2007 02:00 Published by eProp Commercial Property News
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Mayor Helen Zille is 'very relieved' that construction of the 2010 World Cup Green Point project would go ahead

Helen ZilleMayor Helen Zille said this week that she was "very relieved" that construction of the 2010 World Cup Green Point project would go ahead, after Investec stepped in to provide a R185 million guarantee on future income for the stadium.

Zille said the money would make it possible for the city to advance the much-needed bridging finance required to make up the budget shortfall that had been preventing it from approving the R2,85 billion stadium budget.

Investec will underwrite the guarantee for an operating lease on the stadium after the end of the World Cup "on condition" that the stadium's post-2010 operating lease is put out to open public tender as required by the Municipal Finance Management Act.

The post-2010 lease is expected to run for 30 years.

The council is expected to approve the budget, and the contract with preferred bidder Murray & Roberts-WBHO is to be signed next week. Bulldozers are expected to be on site the following week, in time to beat the end-of-March deadline set by Fifa's local organising committee for work to start on the new stadium.

Zille gave a "guarantee" that Investec would not get "any preferential treatment at all, or access of any form" and that the tender process would ensure that Investec had no "inside track in the bidding process".

"Both Investec and the city anticipate that the offer of R185 million should be exceeded by other bidders during an open bid process, which will result in the city accepting the most favourable offer," said Zille.

Any bank could make an offer that exceeded Investec's, she said.

Investec was aware of the injection 2010 could give Cape Town and SA "if managed properly", and realised a successful 2010 would be in SA's interest, "and by extension in the interest of every business in SA", she said.

The arrangement with Investec would not affect any deal Fifa had made with other banks, and the Fifa technical committee and national treasury had been kept informed about negotiations with Investec "every step of the way," Zille said.

An issue still outstanding, said Zille, was that of escalation of more than 10%. The city had budgeted for a 10% escalation, which was very conservative. She said the national government had agreed to appoint a task team to look into the issue.

Zille said government was concerned about giving any indication to the market that they would "simply cough up any escalation over 10%".

 

Last modified on Sunday, 03 November 2013 11:04

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