After the final

Reflections on South Africa’s soccer World Cup

©Mark Wessels/Reuter

In 2010 South Africa became the first African country to host the FIFA soccer World Cup, which is one of the biggest global sporting events on earth. Was it a triumph and what lessons could be drawn? OECD Observer: You were a member of the Local Organising Committee for the FIFA 2010 Soccer World Cup. How big a challenge was that for your country?

South Africa’s approach from the onset was to demonstrate to the world that it was capable of hosting such a prestigious global event and could finish the necessary infrastructure in time. Work on the project started in March 2006. The national treasury designed a management tool and budgeting framework to ensure that we placed boundaries on the overall world cup project. This was based on 24 core projects that, if implemented according to FIFA requirements, would ensure success. Also, the 2010 Government Co-ordination Unit developed project templates that included baselines, milestones, timelines and deliverables.

The national treasury developed models for funding and managing the 2010 departmental projects, which included rigorous reporting for early warning of project cost overruns, and interest support on loans taken out by host cities for the infrastructure projects. The government also set up its own co-ordinating and oversight structures, namely the Technical Co-ordinating Committee and the Inter-Ministerial Committee, chaired by the deputy finance minister and the deputy president respectively.

It must have been a financial burden.

The main cost drivers were the construction of stadia, transport, IT and water infrastructure, immigration, customs and ports of entry. Initially R8.4 billion (US$800 million) were budgeted for the construction of stadia, but this was revised to R13.5 billion due to currency adjustments and increases in input costs. Some R13.3 billion was set aside to cover the public transport infrastructure and motorways.

The economic impact–direct, indirect and induced (through incomes)–of the construction of the stadia totalled R15 billion. Some R7.4 billion of benefits accrued to households, of which approximately R2 billion went to low income households. The World Cup on the level of real GDP was approximately 0.4% in 2010, and the contribution to real GDP in 2010 was approximately R4.9 billion (R37.7 billion nominal).

Upgrades to the international airports at OR Tambo and Cape Town greatly facilitated the movement of both tourists and aircraft. Other social infrastructure, like hospitals and health facilities close to host cities, were also upgraded. Some schools were chosen to serve as training camps, and the visiting teams undertook to upgrade their facilities and assist with coaching sessions for pupils.

What lasting benefits would you say hosting the World Cup has brought to South Africa?

The national government viewed the hosting of the 2010 FIFA World Cup as a catalyst for development and investment in infrastructure, targeting the creation of employment and economic growth, rather than funding just a one-off event. South Africa not only achieved its strategic objective of hosting a very successful tournament which instilled a sense of national pride among South Africans, it also enhanced the country’s image internationally. It is estimated that approximately 450,000 spectators and tourists visited South Africa for the World Cup.

The World Cup also bequeathed the country with stadia, airports, rail, and other public transport infrastructure, as well as information technologies, broadcasting and other systems that the country can use for the foreseeable future.

Tourism and the hospitality industry also benefited tremendously from the tournament, while improved social cohesion was another invaluable, if intangible, benefit for the country.

The preparations for the World Cup provided several important lessons, including the importance of: defining outputs and their location; setting clear, immovable deadlines and timelines; deciding on the key projects or departments that should be involved, and which projects should support the delivery of these outputs.

 It also created a platform for co-operation between different spheres of government, and taught us that prices for contracts given to external agencies should be on a fixed price basis to prevent the escalation of costs.

Any negative impact?

The maintenance of some of the stadia has proved a burden and some of the affected municipalities are looking for innovative ways of making them financially sustainable. The escalation of construction costs was also a serious challenge. Some of the contractors colluded in price fixing, a matter which was investigated, and fines were imposed by the Competition Commission.

How do you think Brazil will cope with hosting the next World Cup in 2014?

Brazil recently hosted a very successful FIFA Confederations Cup and I believe it is on track for the event. It is important that Brazil host a successful World Cup to reaffirm that emerging economies can compete on an equal footing with developed countries in terms of hosting global events.

If you had one word of advice for Brazil, what would it be?

Go for fixed price contracts and avoid vanity projects.

References

Visit www.southafrica.info/2010/ and http://www.oecd.org/southafrica/ 

OECD Observer (2010), “Post-final analysis”


© OECD Observer No 296 Q3 2013 




Economic Data

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter

Twitter feed

Editor's Choice

  • Economic Outlook_video
  • Economic Outlook: The global economy is expected to continue expanding at a moderate pace over the coming two years, but policymakers must ensure that instability in financial markets and underlying fragility in major economies are not allowed to derail growth.Click to watch the video.
  • OECD Forum 2014
    A public event that brings together all sectors of society to share policies and ideas to help shape responses to global challenges.
    Join us on 5-6 May.
  • "There is no shortcut to equipping people with the right skills and to providing them with opportunities to use their skills effectively."

    - Andreas Schleicher, Special Advisor on Education Policy to the Secretary-General, OECD Yearbook 2014

  • Data Lab Image
  • Interactive charts showing aid (ODA) provided by DAC members; by recipient countries and by sector. Click to compare your country.
  • OECD Insights Blog
    OECD Insights Blog by Brian Keeley:
    Results are out for the OECD’s PISA student assessments on “creative problem solving”.
  • Better Life Index
    How do you measure a Better Life?
    On 5 May, the OECD will be launching a new interactive infographic where visitors can explore the priorities of people worldwide. Be a part of it. Create and share your Better Life Index.

Most Popular Articles

Subscribe Now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly


Online edition
Previous editions

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the opinion of the OECD or its member countries.

All rights reserved. OECD 2014