The expectation that the South African government would have to provide more money than Cabinet had approved for the Commonwealth Games could not be sustained in the current economic environment, the Sport and Recreation Minister Fikile Mbalula said.
Mbalula was speaking at the Moses Mabhida Stadium in Durban on Tuesday – a day after it was announced that Durban’s bid to host the 2022 games had been withdrawn by the Commonwealth Games Federation (CGF).
“The South African government has regrettably noted the statement issued by the Commonwealth Games Federation … We wish to state that while we disagree with the contents of the statement, we accept the decision of the CGF as the rights holder,” Mbalula said.
“The government wishes to express its disappointment at the announcement of the CGF to withdraw the country’s bid to host a successful Commonwealth Games in Durban 2022.”
The sport minister said this was despite the effort and positive responses from the Games’ evaluation commission on the potential capacity of Durban.
“When the games were awarded to South Africa, the country had not signed the host city agreement,” said Mbalula.
“Clauses in the agreement were seriously going to compromise South Africa and the government was not prepared to sign an open ended guarantee that indicated that ‘government had to meet any potential shortfall in the budget of the organising committee arising from the preparations for and the hosting of the 2022 Commonwealth Games, and that government also guarantees subsidies or rental costs related to the Commonwealth Games Village’”, he said.
Mbalula said that those requirements led to Durban’s financial guarantee as the host city being delayed. He said the finance minister had signed a guarantee in June 2016 for an operational budget of R2,660,928,000 and a contingency budget.
“The financial guarantee was also subject to the willingness of CGF to constructively engage with the country and Durban on all possible revenue sharing schemes related to the games, including, amongst others, ticketing and broadcasting.”
He said that after having learned lessons from hosting other mega-events, government, “had no appetite to issue an open ended guarantee, including having to transfer a large portion of funds to a newly established private entity”.
Also speaking at the briefing, the director general for sport and recreation, Alec Moemi, said R118-million had been spent to secure bidding rights. None of this could be recouped, he said.
Mbalula said that any loss of money was “regrettable”, but that the country was not in a position to make large financial promises while it was facing multiple socio-economic challenges in the current global climate.
“The bidding was done cautiously. We have experience now, we cannot be duped; we know what we want,” he said.
Mbalula said he did not believe there were ulterior motives to losing the bid. “The [CGF] has a bottom line and wanted to make money,” he said.
He said there was no doubt that the games would have benefitted the country, but that this could not be done “at all costs”.
Mbalula said he did not see the withdrawal of 2022 hosting rights affecting the country’s bidding for other mega-events. The country would continue bidding, he said.
This would have been the first time the games – held every four years – would have taken place on the African continent.
On Monday, the CGF said that a detailed review had concluded there had been a “significant departure from the undertakings provided in Durban’s bid”.
“In line with the mandate from members at the 2016 General Assembly, the CGF is actively exploring alternative options, including a potential replacement host,” said federation president, Louise Martin.
The games see thousands of athletes participating in over 50 sporting codes.
The 2018 games will take place in Gold Coast, Australia.