Book exposes deals behind Durban stadium

A hard-hitting book released this week on South Africa's preparations for the Fifa World Cup fingers a regular club of empowerment elites as the only people to reap the financial benefits of Durban's stadium construction project.

"The benefits of this new stadium are highly concentrated among big construction firms and empowerment regulars, and the local political elite, but the costs, current and future, are spread wide," says local investigative journalist Sam Sole.

He is a contributor in Player and Referee, compiled by the Institute for Security Studies, which focuses on conflicting interests and the World Cup.

While he clears Durban of any obvious corruption in its construction tender processes, Sole points to a few people who have won lucrative tenders in the city and who are now linked to the project.

"Durban has a bit of a history. Some key tenders have been awarded based seemingly more on political connections than on performance. And some of those tenders involved people now in Ibhola Lethu (the lead consortium at the R3.1 billion Moses Mabhida stadium)."

One is Craig Simmer, who was involved in Remant Alton, the city's disastrous attempt at privatising its bus service. He was also a director of the ill-fated Dolphin Whispers development at the Point. Simmer, Sole says, worked for Iliso Consulting, which was one of the consulting firms on the stadium, albeit with less than five percent of the business.

It was put to Simmer by the author that the consortium involved several individuals with a problematic track record in projects, but he said he had resigned in 2007.

Players in Ibhola Lethu are Bruinette Kruger Stoffberg, which Sole describes as an old Broederbond firm that grew strong serving the Afrikaner nationalist project. Sole suggests it has adapted well to the new era. Board members include ex-defence minister Joe Modise, ANC attorney George Negota, prominent Durban advocate Kessie Naidu, Cheryl Maduna, wife of former minister Penuel Maduna, and Peter Wingrove, who worked closely with Penuel at Sasol.

The city selected the Group 5/WBHO joint venture for construction of the stadium. The venture has as its empowerment shareholders the Mvelaphanda group, of which Human Settlements Minister Tokyo Sexwale was then chairman, and Ilima Projects, in which the family of Bulelani Ngcuka has an interest.

"The established construction firms have done well out of the World Cup - to the extent that the competition authorities have launched an investigation. The firms have all denied any form of collusion or price fixing," says Sole.

In response to the Durban chapter in the book, Ibhola Lethu KZN head Tim Ter Haar says the company's composition is public knowledge and there is nothing to hide.

"All contracts for the construction ... were awarded based on transparent tender processes, including the award of the electrical subcontract to Edison Power (owned by Durban businessman Vivian Reddy). I am ... not aware of any irregularities in the award of tenders at Moses Mabhida."

Bruinette Kruger Stoffberg, as the main partner of Ibhola Lethu, was awarded a management contract as "caretaker operator" until the end of 2010. No other Ibhola Lethu member companies are part of the operator management contract.

"The appointment of BKS as caretaker operator was made after a council resolution was passed to award this to BKS, based on BKS's involvement in the design, development of operator concepts and involvement in the 2010 World Cup," says Ter Haar.

Sole notes that the stadium is just part of a much bigger spending plan on World Cup-related projects; he says it is impossible to say how much the ratepayers are in for.

Given that the stadium was a "nice to have" and not a Fifa requirement, he questions if the money could not have been better spent - by preparing Durban for the impact of climate change and rising sea levels.

Get commercial property news by email

Free alerts when we publish — pick a focus or get everything, unsubscribe in one click. Subscribe »