The Green Point Residents’ and Ratepayers’ Association has questioned the City’s move to have a municipal entity operate Cape Town Stadium.
In a statement released by the City of Cape Town last week, they confirmed that the City’s mayoral committee had approved a recommendation to council that a municipal entity be established to manage and operate the stadium precinct area. This entity will be fully owned by the City.
The City’s Mayco member for finance, Johan van der Merwe, said: “Our goal is to minimise the financial losses of the Cape Town Stadium and to maximise the potential income streams by increasing the use of the stadium. In this way, we also hope to create a centre of excellence which is in accordance with the City’s Organisational and Development Plan (ODTP) – a process that we are busy implementing that will transform the work of this organisation in order to transform lives.”
According to the City, the municipal entity will have an independent board, which will be tasked with appointing a specialised management company. A service delivery agreement will be entered into between the City and the entity which will set out financial and non-financial performance indicators.
The report that will accompany the recommendation to council represents the final step of the legislative processes set out in Section 84 of the Municipal Finance Management Act, which needs to be met in order to establish a municipal entity.
However, Luke Stevens vice-chairperson of the Green Point Residents’ and Ratepayers’ Association, has questioned how effective this move will be in cutting down costs. “Cape Town Stadium is a very different creature from the convention centre (CTICC) where this municipal entity model has run most successfully. We therefore do not envisage that this management structure change will make any difference to the (un)profitability of the stadium,” he said. “The fundamental problems of high maintenance and high per-event activation costs, coupled with low demand for the venue will surely persist. “Between the rare events, there seems to be very low remaining interest in the stadium – aside from an occasional, sporadic email enquiring as to why the option to just demolish it has not been properly investigated.”
Mr Van der Merwe said that they were willing to engage with residents on the issue. “This is one of the interventions that the City is harnessing to enhance the viability and sustainability of the Cape Town Stadium and the stadium precinct as a whole. Our goal is to minimise the financial losses of the Cape Town Stadium, to commercialise and to maximise the potential income streams by increasing the use of the stadium,” Mr Van der Merwe said.
In a statement released to the media, the City explained the process which had been followed to date.
“The City was required to precisely identify the function that the entity would perform; undertake an assessment of the impact that shifting the function would have on the City’s staff, assets and liabilities and to solicit comments from the local community, organised labour and specified national and provincial functionaries. The functions of the entity will include general facility and operations; events and entertainment services management; commercialisation, marketing and hospitality management; and finance, legal and administration management.
“Current staff managing the Cape Town Stadium will be seconded to the municipal entity for a period of three years. The City will continue to interact with affected staff and the relevant trade unions, and keep them informed of the processes.”