The South African city of Cape Town’s Mayoral Committee has recommended to the council that a municipal entity be established to manage and operate the Cape Town Stadium.

The entity will be owned by Cape Town, and it will oversee the management of the 55,000-capacity stadium on behalf of the city. It is hoped the new entity will allow the stadium to become more financially stable.

The city’s Mayoral Committee Member for Finance, councillor Johan van der Merwe, said: “Our goal is to minimise the financial losses of the Cape Town Stadium and to maximise the potential income streams by increasing the use of the stadium.

“In this way, we also hope to create a centre of excellence which is in accordance with the City’s Organisational and Development Plan (ODTP) – a process that we are busy implementing that will transform the work of this organisation in order to transform lives.”

The city confirmed that the entity would have an independent board, whose job it will be to appoint a specialised management company. The city and the entity will enter into a service delivery partnership to lay out financial and non-financial performance indicators.

The report that accompanied the city’s recommendation to the council represented the final step of the legislative processes set out in Section 84 of the Municipal Finance Management Act. These processes must be met to establish the municipal entity.

The city of Cape Town was required to provide precise detail of the entity’s responsibility, undertake an assessment of the impact the restructure would have on the city’s staff, assets and liabilities, and solicit comments from the local community.

The entity will be responsible for general operations at the stadium, such as events and entertainment services management, commercialisation, marketing and hospitality management, and finance, legal and administration management.

Current staff managing the stadium will be seconded to the entity for a period of three years. The entity will be appointed for a period of 50 years, with an option to renew for a further 49 years.

The stadium opened in 2009 for use during football’s Fifa World Cup the following year. The facility has also been used to host other sports and leisure events, as well as music concerts.