In the aftermath of hosting a successful R30-billion FIFA World Cup, some South African cities are said to be fired up to bid for the 2020 Summer Olympic Games, which could require investments of more than R40-billion.

Some observers canvassed by Engineering News indicated that they were wary of submitting such a bid, warning of only modest economic benefits and material costs and risks, such as the development of inappropriate transport infrastructure, the construction of ‘white elephant’ facilities and the uneven allocation of budgets. However, others believe the tourism and construction boost could be material, and that there could be significant intangible business confidence spin-offs, as was the case with the World Cup.

The question is whether South Africa, which has serious domestic challenges, such as unemployment, as well as housing backlogs and deep educational and healthcare problems, would be wise to jump straight into such an audacious sporting bid. In other words, would it be more beneficial to postpone a bid to between 2030 and 2040, or to seek to build upon the unquestionable success of the FIFA tournament and take President Jacob Zuma’s words to heart and bid immediately for the 2020 Games.

Possible Candidates
South Africa’s governing Olympic body, the South African Sports Confederation and Olympic Committee (Sascoc), announced in July that it would formally oversee any bid, should one arise. Sascoc president Gideon Sam mentioned that Durban, Cape Town, Johannesburg and Pretoria could all be contenders for the Games.

While authorities in Durban say that the city is keen to put its name in the ring and Cape Town is still considering its options, the high altitude in Johannesburg and Pretoria makes the cities unlikely Olympic candidates.

Durban city manager Dr Michael Sutcliffe says that the city is interested in bidding for the 2020 Olympics. “Once we have sent the letter to Sascoc, indicating that we are interested in bidding and have received the full details from them, I will prepare a report for the executive committee and council to make a final decision,” he explains.

Durban’s bid to host the 2020 Summer Olympics was given a significant boost when the International Olympic Committee (IOC) announced that the city would be the venue for the committee’s 2011 congress to announce the host of the 2018 Winter Olympics.

The congress will see thousands of influential personalities, accompanied by world media, descending on the KwaZulu-Natal city. Durban Tourism acting CEO Perry Moodley says hosting the IOC congress was a strategic move in light of the city’s other ambition to host a summer Olympics.

“Getting Olympic decision-makers from around the world in Durban is most important. We want them to see the infrastructure we have and are building. We believe the city has a strong chance of hosting the Olympic Games,” he said.

Déjà Vu?
Any bid would be South Africa’s second, with Cape Town having finished third in the race for the 2004 Games, behind winner Athens and Rome.

Cape Town mayoral committee member for economic development and tourism Felicity Purchase says that it is still too soon to tell whether Cape Town could tender once again, as the city is still in the process of evaluating the 2010 FIFA World Cup.

“We need to conduct a cost/benefit analysis of an Olympics, look at the Olympic bid book, and conduct a ‘gap analysis’ of what is required and what could be achieved in a given time,” she explains.

She adds that many recent events have cost the city dearly and the Olympic Games will be no exception, as it is a one-city bid, which means that the city will be expected to provide all the requirements.

Cape Town’s report on the 2010 FIFA World Cup is expected to be complete by the end of August, after which an analysis of a possible Olympic bid will start. Purchase points out that careful evaluation must be done. “Ten years is far enough off to plan an Olympic budget, but there are also a number of other things that need funds in the meantime,” says Purchase.

Infrastructure Stretch
Lecturer in economics at Stellenbosch University Johan Fourie notes that the choice of host city depends on a number of factors, such as sport, transport and tourism infrastructure, geographical location and climate, as well as beauty, culture and history. The chosen city must also be able to contend with other famous cities that may bid, such as Doha, Dubai and Rome.

Sam says there is a lot of work to do before launching an Olympic bid. “At this point, there are no cities in South Africa that have the requisite infrastructure that the Olympic movement would need,” he notes.

An aquatics centre, a kayaking or canoeing facility and an equestrian centre are some new facilities that Durban will have to build, as well as many other smaller centres, including a media centre. Sutcliffe notes that the city already has the Moses Mabhida stadium, which was designed to accommodate an Olympics and can be converted into an 80 000-seater athletics venue. The stadium is part of the multisport Kings Park sporting precinct.

Should it bid, Durban claims that it will aim to host an Olympics that focuses on sustain-ability and reduces construction that does not have a long-term legacy.

Sutcliffe notes that it is difficult to say what the expense of hosting the event will be. “You cannot really use London as a case study as they are rehabilitating a whole new area of the city, while we will be building on what we already have. But it could mean an injection of more than R40-billion,” he points out.

While there are a number of infrastructural requirements already in place in Cape Town, such as the Newlands Olympic swimming pool and the integrated transport system, which will be finished by the end of this year, the city will have to build other infrastructure, such as a rowing course and an Olympic village.

Cape Town’s new stadium would also need to be substantially modified, at considerable cost, as it does not have an athletics track, the main requirement to host the Olympics.

However, Purchase notes that these infrastructural challenges can result in new opportunities, as some new infrastructure, like accommodation, can be sold after the games.

Economic Injuries
Experience from past Olympic host cities indicates that there are a number of risks inherent in all Olympic events, which are difficult to manage effectively. These risks include inaccurate budgeting, public debt, inappropriate transport infrastructure, construction of ‘white elephant’ facilities and the uneven allocation of benefits.

If considered from an economic point of view, Fourie believes South Africa should not bid for the 2020 Olympics, as research shows that the sporting event does not hold significant economic benefit for a region.

“Most sport economists agree that, except for Barcelona in 1992, the Olympic Games has, in the past, done little to improve unemployment and productivity. In short, it seldom happens that the people of the hosting country draw any benefit from the Olympics,” he asserts.

Purchase does not believe that an African country can put in the sort of bid that a developed country can, as we do not have the same tax scale. “We can have a successful event, but it will have to be down-scaled. We do not have a working population with money to spend on more stadiums,” she asserts.

The most senior African member of the IOC, Nawal El Moutawakel, agrees, saying that it will be another 20 years before the continent is ready to host the Games.

“I have read studies by some universities specialising in the Olympics, who gave Africa between 2030 and 2040 to host the Olympics Games, as it is a different ball game from the 2010 FIFA World Cup,” says El Moutawakel, who is also a member of the IOC’s executive board.

El Moutawakel claims that an Olympics poses far greater challenges than a soccer World Cup. While the 2010 FIFA World Cup required football facilities and related infrastructure in nine cities, the Olympics needs facilities for 10 500 athletes taking part in 300 events and 28 different sports in one city, significantly increasing the possibility of redundant facilities after the event.

“Africa has many unique problems and other priorities to handle at the moment,” she asserts.

Purchase agrees, saying that, while the 2010 FIFA World Cup had fantastic spin-offs and bidding for the Olympic Games is very tempting, the country must ensure that it is the right decision in every respect.

“Countries that have hosted the Olympics say that the return on investment is far greater for small events held in a regular, sustainable way than for a mega event,” says Purchase.

Andrew Boraine, the current CEO of public– private partnership the Cape Town Partnership, and city manager of Cape Town when the city bid for the 2004 Olympics in 1997, says that Cape Town is already a popular global and local events city, hosting events such as the Design Indaba, the Cycle Tour, the Jazz Festival and the Mining Indaba, and has strengthened its reputation by helping to host a successful 2010 FIFA World Cup.

“We need to be planning now how to bid for a range of sporting, cultural and business events in the future as part of promoting economic growth and job creation and not just on the issue of the Olympics in isolation,” he notes.

Bid Benefits
Sutcliffe believes that hosting the Olympic Games holds many advantages. “Firstly, it means South Africa, after doing so wonderfully in hosting the 2010 FIFA World Cup, will stay in the world spotlight. This has significant marketing potential and continues to show that Africa can be an excellent host,” he asserts.

He adds that Durban, as a city, will benefit economically, as a result of infrastructure spend, marketing and tourism spend. The city can also benefit socially, with the completion of its public integrated transport that links the whole city, information and communication technology investments, densifying housing along key corridors and building an athlete’s village, which could become social housing afterwards. There can also be environmental benefits, boosting Durban in its aim to remain Africa’s greenest city.
The elements of social cohesion that such an event brings are also unquantifiable. “Hosting the Olympics will lift the profile of the host city and improve tourism. But, from an economic point of view, it is probably not worth it,” Purchase asserts.

While Fourie acknowledges that tourism and construction will benefit from hosting the Olympics and that local prestige, for both the community and politicians, is also a motivating factor for bidding for the Olympics, he believes that the redeployment of the national budget may be the most important factor in the decision to bid for the Olympics.

“Cities often struggle to secure proportional infrastructure expenditure from national government. The hosting of the Olympics allows host cities to claim a larger budget from the national Treasury,” he asserts.

This will result in much-needed transport development, particularly public transport. However, residents of other cities will pay for one city’s development.

An important developmental benefit of the Games is provided by the job opportunities created by preparing for and hosting the Games. Opportunities also exist for skills development and the empowerment of members of disadvantaged communities through job-training programmes, parti-cularly in the tourism, construction and communications sectors. The additional skills will contribute towards improving overall productivity levels and provide an incentive for further investment.

However, most Games-related job opportunities created in tourism and construction are likely to be temporary. The extent to which permanent jobs are created will depend on the long-term growth in tourism resulting from the Games. Further, most of these Games-related employment opportunities are likely to be in the lower-skills, lower-wage sector.

Meanwhile, IOC president Jacques Rogge said in a statement that South Africa had already successfully staged the All Africa Games in 1999, the 1995 Rugby World Cup and a number of major cricket tournaments. He added that it was now up to the nation to decide whether the Olympics should be hosted in South Africa.

While Durban currently seems to be the most likely city to get the national nod, Boraine points out that Cape Town and other cities can still capitalise on large numbers of visitors and country branding and marketing.

Secret to Success
Boraine believes that an Olympic bid can only succeed with 100% backing from other spheres of government. “One of the weaknesses of Cape Town’s bid in 1997 for the 2014 Olympics was lukewarm support and, in many cases, direct interference from national govern- ment. However, things have improved since then, with examples of good intergovern- mental cooperation around the 2010 FIFA World Cup demonstrated over the past three years; so, perhaps, that pitfall can be overcome,” he asserts.
Cape Town executive mayor Dan Plato agrees, saying, at the full council meeting of the City of Cape Town, in July, that it would be inconceivable to host the Olympics without support and guaranteed funding from the national government.

He added that there must be a return on effort and investment benefits for the host city and all its people. In Cape Town’s case, he stressed that the facilities and gains from hosting such events should support the city’s long-term development goals and events must be used as an economic catalyst.

“Now that the 2010 FIFA World Cup is over, we need to buckle down and reset our focus on the bread and butter issues that face the people of Cape Town on a daily basis,” said Plato.

Spending Priorities
Fourie believes that the money budgeted for the Olympics should rather be spent on education, health, housing and water and sanitation. However, he points out that there are ways to minimise the negative economic impact. “The Olympics can be used as a catalyst for urban renewal, road, rail and public transport infrastructure, housing, security and communal recreation,” he points out.

Although the country still faces domestic challenges, like unemployment, housing and education, Sutcliffe does not want to equate these challenges with the challenge and expense of hosting the Olympic Games. “We must tackle backlogs and deal with unemployment, but that does not mean we should not also engage in events like the Olympics. Such one-off events allow us to keep positioning ourselves as a world-class country, ensure economic growth and build infrastructure, as well as ensure that we continue to be a sporting nation,” he asserts.

He believes that a successful Olympic project must be sustainable and properly funded with the right team driving it. “The most significant challenges that must be overcome in Durban and in South Africa to host the Olympics include getting our whole country behind the bid, dealing with Afropessimism and marketing ourselves to the world,” he says.

Fourie recommends that South Africa should rather bid for the 2024 or 2028 Olympic Games. “While the sport infrastructure will probably be ready by 2020, the road, rail and air transport infrastructure will need more planning and community contributions,” he says.

Sam adds that the Olympics is an enormous event that is not to be taken lightly. “A vast amount of homework and consultation has to be done and all sides of the equation have to be taken into consideration by the stakeholders concerned,” he points out.

The IOC’s decision on the host for the 2020 Olympics will be made in 2013, but preliminary bids must be submitted next year. So far, Rome is the only city to have formally announced it will bid for 2020.