DURBAN 2010 WORLD CUP PREPARATIONS ON TRACK, BUT CUTTING IT

1.(U) Summary: eThekwini Municipality's Head of Strategic
Projects and 2010 Unit Ms. Julie May Ellingson believes Durban's
2010 preparations are proceeding well but could be derailed by
escalating costs for stadium construction, late completion of
other 2010 related projects and strict FIFA processes related to
communication, marketing and selection of service providers. She
also believes that 2010 will be good for South African tourism
industry as thousands of tourists will arrive and spend money in
the local economy. Ms. Ellingson is confident South Africa will
overcome challenges of transport, accommodation and crime to
stage a very successful World Cup.


2010 Helps to Fast-Tracking Development Projects but Time Frames
Tight



2. (U) Ms. Julie May Ellingson met with Consul General and
Pol/Econ Assistant on February 2 to discuss Durban's
preparations for 2010. She began the discussion by noting that
most of the city's major projects were not initially linked to
2010, but the World Cup helped to fast-track these projects,
which were already planned. The major infrastructure projects
underway include the new King Shaka International Airport, R6.8
billion, Beachfront Development Project. Ms. Ellingson said the
time frame for these projects is very tight and identified the
Beachfront development as having a tighter schedule and doubted
it will be completed by 2010. She indicated that if deadlines
are not met, the impact will be greatly felt especially by the
local private sector.


Moses Mabhida Stadium On Schedule, Over Budget



3. (U) Ms. Ellingson noted that construction of the Moses
Mabhida Stadium is progressing well and expected it to be
finished before the deadline. She said a Sports Precinct will be
built around the stadium to ensure that the project has future
utility. Ellingson noted that the cost of building the new
stadium has increased greatly because of foreign exchange rates
and increases in the price of construction materials.

She noted that the stadium was initially expected to cost R2.6
billion but is now estimated to cost R3.1 billion. She said the
city contributed R500 million, the province R300 million and the
rest was funded by the national government.

The resulting impact is that many aspects of the project have
had to be scaled down to save on costs, as additional funding is
not available. However, Ms Ellingson noted that the increase of
R500 million in Durban was not as bad as in Cape Town. She said
"the situation is under control in Durban".
(Reference 08CAPETOWN223)

Ms. Ellingson said municipalities of Ugu (Port Shepstone) and
Msunduzi (Pietermaritzburg) also received funding of about R150
million for 2010 related projects. She also indicated that
stadia in historically disadvantaged areas around Durban,
Clermont, Umlazi and KwaMashu are also being refurbished as they
will be used as training facilities during the World Cup.


Transport is Single Biggest Challenge



4. (U) Ms. Ellingson acknowledged that transport infrastructure
is the biggest challenge facing South Africa in relation to


2010. She is confident that the new International Airport will
be finished and operational before the World Cup but
acknowledged that there was a tight completion schedule.

(U) Ms. Ellingson confirmed that the city will mostly use a bus
transport system for 2010 visitors. She said the tender for the
bus system is out and the municipality will select a vendor by
end of March 2009. She also said Durban will use a ticket system
that will allow commuters to use various modes of transport with
one ticket. Ms. Ellingson said the city is currently piloting
project "People Mover" with buses which are safe, clean and
punctual. She said the city is looking at working more closely
with the taxi industry to improve it and is looking for creative
ways to use taxis during non-peak hours between 9 AM and 3 PM.
(Reference: 08DURBAN65)


KZN Tourism to Benefit But Challenges of Accommodation,
Marketing Remain



5. (U) Although Ellingson has seen visitor estimates as high as
750,000 visitors to South Africa during the World Cup, she
believes the actual number will be closer to 350 000 . She said
the municipality is working with Tourism KwaZulu Natal to create
a tourist package that will attract visitors to Durban and
KwaZulu Natal. She noted that working with the FIFA- appointed
travel coordinator had been problematic because its approach is
oriented to more typical venues in the developing world that
offer many high-end hotels. FIFA has since named specific tour
operators to organize travel for the United Kingdom and Europe
(a tour operator for the U.S. is still to be appointed). As a
result, the situation has improved because these tour operators
better understand the system of B&Bs and guest houses in South
Africa.

(U) Ms. Ellingson said it is critical to make sure that 2010
tourists spend money in Durban during the World Cup. Ms.
Ellingson acknowledged that accommodation is another challenge
facing Durban as not enough beds are available for visitors. She
indicated that three hotels are currently being developed in
Durban to cater for 2010.


Creative Approaches to the Challenge of Crime



6. (U) Crime could negatively impact the 2010 World Cup,
Ellingson acknowledged, and South Africa is receiving assistance
from an American team of security experts in this regard. She
said that a Joint Operational Centre involving representatives
from national, provincial and local level will coordinate crime
prevention initiatives during the World Cup. She indicated that
Durban has a detailed plan for creating parks in the beachfront
area to cater for fans and tourists who cannot afford tickets.
These fan parks will be controlled by the city and will be very
secure.


Maximizing Economic Benefits but Small Enterprises Face
Challenges



7. Ms. Ellingson believes 2010 will provide businesses major
economic opportunities but that it will be difficult for Small,
Medium Businesses to take full advantage of the economic
spin-offs from 2010 because they lack financial capital, skills
and capacity. She believes fan parks will benefit small
businesses and the informal sector more. She said, "if one
visitor leaves Durban with money in his/her pocket, we have not
done our job well".


Comment



8. (U) Durban's preparations for 2010 are progressing well in
spite of challenges with regards to transport, accommodation and
crime. Time frames for other 2010 related projects seem to be
tight and there are doubts about their readiness for 2010. The
issue of crime could be a concern for many tourists who might
travel to South Africa for the World Cup. South Africa's plan to
fight crime during the World Cup is critical to alley the fears
of potential tourists.

(U) Escalation of costs for stadium construction could delay its
completion as the city and the national treasury fight over who
should foot the bill for additional costs.

U) The economic spin-offs from the World Cup might not filter
down to ordinary South Africans, informal sector and small
business because of limited economic opportunities for them.

(U) 2010 will also benefit historically disadvantaged areas
surrounding Durban as they have been allocated funds to
refurbish their local stadiums as part of preparations for the
World Cup. This will be a lasting impact of 2010 in these
communities. The fan park concept might prove to be a smart idea
as many local soccer fans might struggle to afford tickets to
watch the games at the stadium.


DERDERIAN