VENTURES: Green Point Operator Appointed
Recent Western Cape Business News
The City of Cape Town’s Bid Adjudication Committee approved the award of the service contractor for the operation of the new Green Point stadium to the consortium of Stade de France and South Africa’s SAIL Group. The legal entity formed by the consortium is Business Venture Investments 1317 (Proprietary) Limited.
The award includes for the consortium to be involved with the management of the Green Point stadium from January 2009 to help ensure the successful hosting of eight World Cup matches. The City will pay the consortium to manage the stadium up to and during World Cup 2010 as a 68 000 seater stadium.
Thereafter the consortium will lease the stadium from the City for a period of not less than ten and not more than thirty years with review periods at certain points. The City will receive 30% of Earnings before Tax (inclusive of municipal rates) on a fixed percentage basis. Thus, if the stadium becomes very successful, the City’s returns rise significantly. The approval of the lease of the stadium resides with Council and will be considered on 3 December 2008.
After 2010, the stadium will be reduced to a 55 000 seater. The stadium can cater for rugby, soccer and other sport events, music concerts, major events and spectaculars. It will have, amongst others, corporate hospitality suites, medical, training, conferencing and banqueting facilities. The consortium will operate the stadium as well as manage and maintain the defined areas of the surrounding urban park and sport precinct on the 85 hectare Green Point Common from stadium revenue.
Mike Marsden, Executive Director of Service Delivery Integration of the City of Cape Town, said: “The City is very pleased that this comprehensive and detailed negotiating process has come to fruition. Cape Town is gaining a world-class, purpose-built stadium in arguably the most beautiful setting in the world. It is getting a team with an international and local track record of experience and success to maximize the value, revenue and viability/sustainability of its stadium.
“Cape Town residents and visitors are getting a world-class facility which will host prime sports matches and spectacular events as well as gaining an upgraded sport and recreation precinct. This is very good news for Cape Town,” said Marsden.
The in principle agreement provides for a detailed contract to be signed between the parties which will describe the roles and responsibilities of the City and the operator in terms of aspects such as maintenance, parking, informal trading, insurance for eventualities and sureties. The operator has offered sureties totaling R10 million.
Stade de France is a successful and profitable 80 000 seater multi-purpose stadium in Paris, France that hosted the 1998 FIFA World Cup™ and the Rugby World Cup in 2007. SAIL is one of the largest sport marketing companies in South Africa.
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