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Downturn threat to SA World Cup

21 November 08 14:45 GMT

By Bill Wilson
Business reporter, BBC News, Johannesburg

Drive from Johannesburg's main international airport into the city during rush hour, and the silver lining to the slow-moving traffic is that you get to study the hoardings advertising the forthcoming Gautrain.

The 80 kilometre railway system is a much-needed transport link, which, it is hoped, should be built in time to whisk World Cup 2010 visitors who have just touched down into town.

And, although it may be a tight squeeze to be ready in 18 months for the tournament kick-off - "blasting work here" signs still feature on the roadside - at least the 2010 organising committee has the power to influence the government on this.

It is a similar issue with stadiums, with well-publicised problems at Cape Town, and at some other venues which are facing looming deadlines and rising budgets.

But, again, the issues are tangible, and world football body Fifa and the South African organisers are in agreement they will work together to do whatever physically needs to be done.

Global slowdown

Of more concern, and less visible, is the potential effect of the global economic downturn, which has left South Africa facing a possible recession.

The rand has been sliding and South Africa's benchmark stock index has been close to its lowest level in almost three years.

All this comes just as the country is launching a publicity drive for its hosting of the 2009 Confederations Cup, a preamble to the World Cup.

"Will it [the global downturn] have an impact on the Confederations Cup? No," says Dr Danny Jordaan, chief executive of the 2010 World Cup organising committee.

"We are using existing stadiums, we are talking about meeting specific event requirements."

The Confederations Cup is a eight-country tournament, held in the year before a World Cup in the host nation, to enable it to have a 'dry-run' for the big event as much as possible.

But in one regard it is different. In terms of audience the 2009 event is not expected to draw many overseas visitors to Africa.

Mass audience

But if those visitors choose not to come in 2010 because of economic issues, that there would then be real problems.

"We did not calculate that we would have a high number of foreign fans coming to the Confederations Cup," says Dr Jordaan.

"We are going to have a tournament that encourages South Africans to follow the event - that decision was taken before the global economic downturn."

And on the economic prospects in the run-up to South Africa 2010 he also seeks to be sanguine.

"We will just have to wait and see," says the man who was a driving force in bringing the World Cup to the continent for the first time.

"Indications are that in the second quarter of 2010 there would be an improvement in the economic situation in the world."

If so, that would be convenient timing for South Africa, with the World Cup being staged in the middle of that year.

"There are different scenarios," says Dr Jordaan, who will give a further World Cup update at football business seminar Soccerex on Monday.

"We have to adopt a wait-and-see attitude, and if we accept that people have fewer dollars in their pockets, however these dollars will buy more rand because of the crisis," he says.

"Six months ago, it was seven rand to the dollar, now it is 10, and by December it could be 20.

"People might still travel to the destination because it is cheaper because of the exchange rate."

Mr Jordaan admitted that at a World Cup host city forum held over two days recently, the global economic crisis and a resultant rise in 2010 costs, was discussed.

However he also points out that South Africa is far from being only country hit by the global downturn.

Test run

For the time being eyes are now focussing on running a successful Fifa Confederations Cup from 14 to 28 June 2009.

As Irvin Khoza, chairman of the Fifa 2010 World Cup organising committee, points out: "As a country we are sure we are going to get a test of what to expect in 2010."

And Jerome Valke, Fifa secretary general, says next year's event "will give us a road map of where we have to improve, what we have to add, what we have to redesign."

But, looking to the 2010 World Cup and a potential global audience, he adds: "We want to push and promote an experience in South Africa."

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