presentation to the portfolio committee on sport and recreation – funding of 2010 stadia presented...
TRANSCRIPT
Presentation to the Portfolio
Committee on Sport and
Recreation – funding of 2010
stadia
Presented by: Mike Marsden,
Executive Director: Service Delivery Integration, City of Cape Town
Date: 20 April 2023
AgendaBasis for original stadium estimateTotal cost Green Point stadiumSecured fundingFunding shortfallStadium development processStadium design and cost-effectivenessPrice escalationReasons for price escalationMunicipal Finance Management Act constraintsSuggested way forward
Basis for original stadium estimate
Detailed design to state of being able to extract quantities
Value engineering - cost reductions
International and local Quantity Surveyors with current industry rates
Final engagement with OC Technical Team
Estimate included in Business Plan
Cost analysis (excluding VAT)Item Bus. Plan estimate Tender
Tender price 1 842 601 000 2 630 000 000
Qualifications NIL 116 665 000
Escalation (10%) 184 260 000 274 667 000
Contingencies (5%)
101 344 000 151 067 000
Prof. fees 361 795 000 517 736 000
Insurance 10 000 000
FIFA overlay 30 000 000
Total 2 490 000 000 3 730 135 000
Secured funding for stadium
Nat. Dept. of Sport & Recreation
City of Cape Town
Provincial Government
Total
R1 960 000 000
R 400 000 000
R 112 000 000
R2 472 000 000
Cape Town’s other contributions include:
Electrical infrastructure R200 million
Reconfiguration of Common R120 million
Transport R165 million
IT & T R57 million
Operational expenditure
Funding shortfall
Provisional projected cost
Secured funding
Shortfall
R 3,730 billion
R 2,472 billion
R 1,258 billion
Stadium development processAppointment of professional teamConcept design and initial business planDetailed design and final business planFunding allocationPublic tender
Pre-qualification stagePriced tender
Appointment of preferred bidderNegotiation with preferred bidder (presently underway)Finalise costSecure funding (MFMA compliance)Award contract
Stadium design & cost-effectiveness 1
Design informed by:FIFA requirementsEnvironmental Impact Assessment/Record of DecisionFinancial sustainability
Functional, not iconic designValue engineering
Initial review and amendments madeR3,3 billion > R2,49 billion
Stadium design & cost-effectiveness 2
Secondary review underway
Roof design
Roof materials
Cladding materials
Construction technique
Escalation
National Treasury requested to underwrite
Awaiting response
Reasons for increase in tender prices
National, not Cape Town specific challenge
South African construction industry capacity
Skills shortage
Material shortage
Plant shortage
Supply and demand
Very tight timeframes
MFMA constraints
Supply chain management process
Construction contracts cannot be awarded without secured funding
Delay costs = R20 million per month
Suggested way forward
Tender prices received by all host cities be scoped by Nat. TreasuryNat. Treasury consider possible interventions with construction industryHost cities negotiate with preferred biddersHost cities undertake second stage of value engineeringNat. Treasury convenes meeting of host cities to review national situationNat. Treasury reviews budgetary allocationsDemolition of existing stadium to proceed
Questions?
Enkosi
Thank You
Dankie