An Argument For Massive World Cup Infrastructure Spending

An Argument For Massive World Cup Infrastructure Spending


Brazilians protested en masse against spending $11 billion on the 2014 FIFA World Cup tournament, but the 2010 football event is still a source of pride for many South Africans, Bloomberg reports in IndependentOnline.

Four years later, many commuters in Johannesburg save time from transportation improvements to the nation’s commercial hub, where before many had to rely on clogged roads jammed with accident-prone minibus taxis.

“It was great having the 2010 World Cup here,” said Alexander Schirge, 42, a computer programmer who no longer has to drive an hour to work in Sandton from the suburb of Melville. “There has been a definite improvement in public transport.”

South Africa spent 30 billion rand ($2.79 billion US) hosting the month-long 2010 World Cup, including 11.7 billion rand on building and renovating 10 stadiums, the government said in its final review, released in November 2012, Bloomberg reports.

The price tag excluded money spent on planned transportation upgrades that were accelerated to cater for the influx of 300,000-plus fans.

The 2010 World Cup created 415,400 jobs, added 55.7 billion rand, or 0.2 percent, to South Africa’s gross domestic product that year, and generated taxes of 19.3 billion rand, the government said in its 2012 assessment, based on research by accounting company Grant Thornton.

Eddie Cottle, editor of “South Africa’s World Cup: A Legacy for Whom,” questions those numbers. His book is a critical analysis of the impact and legacy of mega-sporting events that challenges mainstream thinking and mega-event praise singers, according to amazon.com.

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The tournament took funds away from more important priorities such as affordable housing, and mostly benefited wealthy citizens and FIFA, world soccer’s governing body, Cottle said.

While the South African government provided homes for 2.8 million poor families with since the end of apartheid in 1994, about 10 million people still lack proper shelter, Bloomberg reports. Many in the Joburg area live in 2,000 sprawling shanty towns on the outskirts of Johannesburg and other cities.

Jason Blackman is sub-Saharan Africa operations manager for Deutsche Post AG’s DHL Express unit.

A trip that once took more than an hour by road now takes his couriers 14 minutes to get from Johannesburg’s Sandton financial district to the airport on a high-speed Gautrain rail link. The link was completed just days before the first World Cup kickoff in 2010.

“There were a lot of naysayers who questioned South Africa’s ability to handle the World Cup,” Blackman said. “We proved them wrong.”

The event’s most enduring legacy in South Africa was the impetus it provided for the transportation-system upgrade, Bloomberg reports.

The high-speed Gautrain began operating between Sandton and Johannesburg’s main airport in mid-2010 and was extended to the capital Pretoria in 2011.

More than 52,000 commuters use the 80-kilometre (50-mile) system daily, helping relieve road congestion.

FIFA doesn’t pay taxes to host nations

As a rule, FIFA doesn’t pay taxes to the host nation, Cottle points out. “We wasted millions of rand of public funds, especially on building and upgrading the 10 stadiums, which continue to be underutilized and run at a loss.”

In a 2010 study, University of Maryland economics professor Dennis Coates found no evidence that promised benefits ever materialized by organizers of mega-events such as World Cups, Super Bowls and Olympics.

Germany claims the 2006 World Cup added 2 billion euros to retail sales, created 50,000 new jobs and earned the tourism industry an extra 300 million euros ($410 million US) in revenue. However Hamburg University economics professor Wolfgang Maennig argues there was no meaningful boost to the economy.

Benefits outweigh liabilities

While the reduced congestion and improved highways made commuting easier, the benefits have been offset by contentious toll fee increases and rising fuel prices, Blackman said in a June 12 phone interview, Bloomberg reports.

Even so, Blackman  said he sees the pluses outweighing the negatives.

“People have seen South Africa’s ability to… handle-world class events and made aware that we do have decent roads and world-class airports,” he said. “…It gave a very positive projection of South Africa. The World Cup had a unifying effect.”