Gordhan to cities: Next year you're on your own

The Finance Minister on Tuesday warned soccer World Cup host cities that after this year they will be on their own to cope with interest payments on loans taken out to pay for their spanking new stadiums.

Giving a written reply to a Parliamentary question from Narend Singh of the Inkatha Freedom Party, the minister said: "The national fiscus assisted with interest payments, in financial years 2009-2010 and 2010-2011, on long term loans taken out by the host cities.

After which the host cities should have appropriate business models to ensure financial sustainability of the facilities in place."

The minister made it clear that the new stadiums were built at a cost well over budget. He explained that budgets were created before architects, design engineers and cost estimators knew what the costs would actually be, and accordingly allowed significant provisional amounts.

Accordingly the cities asked for extensive help from the national fiscus. He said that Johannesburg asked for R814 million extra.

Cape Town asked for R650 million, Durban (eThekwini) wanted R114 million, Mbombela R56 million and Polokwane R60 million.

Source: I-Net Bridge

Article by: www.sapropertyinvestor.co.za