The City of Cape Town has outlined a proposal to lease Cape Town Stadium to a newly-created municipal entity for just R100 (£5.29/€6.14/$6.83) a year in a move that has been criticised by ratepayers in the South African city.
South African news website IOL reports that the stadium company would receive a subsidy to operate and manage the venue, adding that the agreement is in line with the definition of “right to use, control or manage” a capital asset. The lease agreement would run for 50 years, with the option of a further 49. The rental rate would be reviewed every three years.
The city would retain responsibility for any renovation work at the 55,000-seat stadium, which was built for South Africa’s staging of the 2010 FIFA World Cup. IOL said that while the new entity would not own the stadium, it would oversee day-to-day operational costs and maintenance.
IOL notes that the city has justified the rate by insisting that if a market-related rental was charged, the entity would simply use the subsidy to pay the rental back to the city, effectively eliminating the need for this charge.
In a statement reported by IOL, the Green Point Ratepayers Association said: “This objection to the leasing of erf 2188 by the Municipal Management Entity is based on the total lack of disclosure to the public and interested parties.
“Until a full investigation has been held into the accountability for the huge sum that was either donated or loaned to this management entity, this lease must not be allowed to be granted.”