South Africa's World Cup half empty

AS FOOTBALL fans around the world prepare for one of the most spectacular global sporting events this summer, a major investigation suggests that, essentially, two World Cups were awarded to South Africa for 2010.

Most visible was the 32-team tournament. Less apparent – and more contentious – were business arrangements that have raised serious questions over a conflict of interest between the public and private sectors.

A book published this week by the Institute for Security Studies (ISS) in South Africa, entitled Player And Referee: Conflicting Interests And The 2010 Fifa World Cup, details six case studies regarding stadium building, official suppliers, bidding practices and government oversight that cast a harsh light on the lack of transparency and public benefit of such arrangements.

The case studies, written by investigative journalists from South Africa and the UK, charge that competing interests among those seeking to benefit financially have left preparations for the 2010 World Cup vulnerable to "manipulation through the use of influence, political pressure, bribes, fraud and extortion".

Many of these accounts have a familiar ring, addressing issues that occurred at previous World Cups. Fifa, soccer's world governing body, has regularly faced charges of secrecy and corruption.

Sepp Blatter, the Fifa president, who is attending a convention this week in Dubai, could not be reached for comment.

Taken together, the case studies provide a stark contrast between the stated goals of bringing the World Cup to Africa for the first time – enhancing national identity, raising the international profile of the continent's most developed nation – and the potential for corruption that accompanies such a huge event.

There seems "to have been very little in the form of competitive bidding" for lucrative stadium construction contracts, along with suspected price-fixing in the steel industry that led to significant cost increases in the building of the arenas and other infrastructure, the authors report.

The estimated taxpayer bill for stadiums, rail links and other projects has risen to approximately 1.5 billion from 203 million, drawing complaints at a time when South Africa still struggles to provide housing, electricity and running water in parts of the country.

The book refers to a Citibank economic impact study that said Fifa, which stands to generate income of 2bn to 2.6bn from the 2010 World Cup, "is the major beneficiary" while South Africa, the host nation, "carries a disproportionate share of the cost burden".

As with the 2002 World Cup hosted by Japan and South Korea, there is concern in South Africa about whether some stadiums will become white elephants after the competition ends on 11 July.

Fifa "strong-armed" Cape Town officials to build a stadium in an area where it is little needed, leading to concerns that Green Point Stadium "will become financially unviable after the World Cup".

Government oversight has also been called into question. Under a shadowy arrangement, the report says, the city of Johannesburg effectively ceded the potential profits from operating the World Cup's showpiece stadium, the 94,000-seat Soccer City, to a little-known company called National Stadium SA.

The ISS investigation also scrutinises the companies that will supply official services for Fifa during the World Cup.

Match Event Services, the official hotel and ticketing provider, was awarded its contract by Fifa without public bidding and has marked up room costs by 30 per cent. The company is controlled by a family from Britain, the book says, which means that "a large chunk" of the profits from hotel accommodation will not stay in South Africa.

A related company, Match Hospitality, which has exclusive rights to offer hospitality packages to corporate clients, includes as one of its shareholders a business headed by Philippe Blatter, the Fifa president's nephew, the book says.

"Power is disproportionately allocated in favour of Fifa and corporate entities to the detriment of the host governments and their citizens," the book concludes.

And given the fact that such sporting events look set to increase in size, generating mouthwatering profits, the authors suggest some kind of monitoring should be agreed.

The book says: "When confronted with an opportunity to host mega-events, governments should adopt economic models that base their evaluations of heavily state-financed projects on criteria that prioritise public good and long-term sustainability.

"With many more mega-events being proposed globally, and much larger ones at that, it is crucial that related infrastructural projects become economically viable and environmentally, socially and ethically sustainable. To achieve this, politicians, policymakers and event organisers must find innovative ways to overcome the twin dilemmas of ethics and effectiveness in performance management.

"They should instead be regarded as mutually supportive concepts that contribute positively to the governance of mega-events."