The City of Cape Town’s Mayoral Committee approved a recommendation to council on Monday, that a municipal entity be established to manage and operate the Cape Town stadium on behalf of the city.
“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”, said said the City’s Mayoral Committee Member for Finance, Councillor Johan van der Merwe.
Van Der Merwe explained that by minimising financial losses, the City also hopes 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”, said Van der Merwe.
The entity would be a state-owned company, fully owned by 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 would accompany the recommendation to council represented the final step of the legislative processes set out in Section 84 of the Municipal Finance Management Act, which need to be met in order to establish a municipal entity.
In following these processes, 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.
The entity will be appointed for a period of 50 years, with an option to renew for a further 49 years, in terms of the required Municipal Asset Transfer Regulation. The entity will manage and operate the Stadium precinct, with the possibility of extending the management function to the wider Green Point Park precinct in future.
“The City will continue to provide support services to the municipal entity for a period of three years. These services include human resource support, internal audit, risk management, accounting, financial management and budgeting support”, said Van der Merwe.
“We are committed to enhancing the financial sustainability of this key strategic asset, as well as its benefit to the broader community and the city’s economy. The establishment of the municipal entity will help to achieve this, and is in line with the City’s broader vision, as set out in the ODTP, to modernise and streamline our government,” added Van Der Merwe.