Michelle Rafferty, Publicity Assistant
I recently chatted with Gillian Saunders, director of Grant Thornton Strategic Solutions, the consulting firm that has been working on the 2010 World Cup for over a decade now. In this podcast she explains why South Africa got the bid, how preparation for the tournament has changed the country, the controversy behind the giant stadiums, and the one thing you should see when you visit South Africa. Be sure to check out more “Place of the Year” contributions here.[audio:gsinterview.mp3]
Rafferty: So Gillian, I was wondering if first you could first discuss, give us an overview, of the role Grant Thornton has played in the preparation for the World Cup.
Gillian Saunders: Well we were first approached in the late nineties by the South African football association, FIFA, to assist them with looking at a bid for the World Cup, and they felt that the way to promote this country going for the bid, was to look at the economic impact it would have on the country. So we did an economic impact analysis then; subsequent to that we did one for the 2006 bid and then we did another one for the 2010 bid which of course was a successful bid and we now actually have the event happening next year. Since then we’ve updated it a couple times. Most recently only last year, haven’t updated it again since, we will plan to update it after the draw in December when there’s a lot more finality about exactly who’s coming, where they’re traveling, etc…
Rafferty: In 2004, what role did you play in South Africa winning the bid to host the tournament?
Saunders: Well I think one of the reasons that Africa was seen as an attractive destination for the event was people did feel that it’s an event that can actually help the economy of a country like South Africa and other countries in Africa, and that was what we demonstrated and what went into the bid book and what helped I think position South Africa as a meritus winner of the event; and if we go back even further, the initial exercise we did, and it was based on work we’d done previously for Grand Prix that had been successful as well in terms of saying that major sporting events actually leave an economic legacy and are beneficial to the destination. And that you know there are some people that feel the benefit is minimal, that the benefit is often not only measured in the actual economic benefit of the event or the net additional economic benefit of the event, but the profiling of the destination that has a knock-on effect for trade, investment, and tourism in years after the event. So we looked at all of that, and basically our exercise was used by the football association to get South Africa to buy into bidding for the event. And the FIFA 2010 event is a huge undertaking from a government perspective; the country has to give a lot of guarantees and has to be involved in a lot of the infrastructure needs if there are such. So it brought our government on board to go for the event
Rafferty: So since winning the bid, what role has your firm played in the preparation for the tournament?
Saunders: We’ve been very involved with a number of the venue cities. We’ve worked on specific economic impact studies for those cities so that they can understand the benefits to the city itself. We’ve also worked on the stadia, for, in fact eight of the stadias out of the ten that are being used, we’ve done the business plan for. That was used by the National Treasury to make decisions on what funding to give to the stadia development projects in each city. Then we worked on destination marketing work for provinces and towns and neighboring countries, doing strategies of how they can best maximize their involvement in the event, as well as how they can protect what they may need to protect in terms of if the event has a negative impact on their country. So for instance neighboring countries like Namibia and Botswana, it’s very much their high tourism season, and they need to have the strategy to maintain their normal tourism markets so that the tourists don’t feel crowded out and don’t not come. For instance the Olympics in Greece, when they were in Athens, I think it was in 2006, 2004, they saw one of their worst seasons on the Greek Islands, simply because tourists start to feel, “I can’t go there, it’s too busy for me.” So we’ve been working on strategies like that with neighboring countries and with towns, in South African towns and cities.
Rafferty: So, how has the preparation for the World Cup affected the economy in general? Or how different does the country look from 2000 when you began doing this research? Does the landscape look any different? Do you think the economy has improved?
Saunders: I think the main change in South Africa is the government has put a huge amount of money into infrastructure. The normal amount that often gets quoted is more than 400 billion rand. Now what a lot of that is, is accelerated infrastructure projects that would have been needed and should have been done anyhow. But we were, if you like, very lucky that the World Cup became an impetus or a catalyst for all that happening. But within that is probably of the order of 30-40 billion rand worth of infrastructure that’s directly related to the event. Which is transport infrastructure around the stadia themselves and the stadiums. And I don’t know if anybody’s been lucky enough to see our stadiums, but we’ve got some stunning stadiums coming up. The one in Cape Town has had it’s lights lit up now, and you’ve seen it against the sort of backdrop of Table Mountain and the harbor and the port. It’s an amazing thing to see. We’ve got another beautiful stadium, in, new stadium, in, or more or less new, in Johannesburg called Soccer City and it’s designed after a calabash. And so these things are coming up around the country and people are seeing them either reported on the news, photgraphed in the newspaper, or they’re going past them themselves and they look stunning. And our transport infrastructure is still rather a lot of building signs and road works, but we can see that we are getting some massive improvements to our transport infrastructure. What’s happening now as well, I think the ball has really started rolling with the Confederations Cup earlier this year, is the sponsors and the host cities are really getting behind the programs and advertising that are sort of getting the population now to feel very positive and proud about the events coming. So there’s a lot of billboards that are using 2010, there’s a lot of advertising, a lot of merchandise in the shops that’s already out there. So it’s starting to build up the excitement in the country towards the event and that’s beginning to go quite nicely. We have something for instance, it was started by the tourism industry, instead of having casual Friday, we have Football Friday. And everybody wears a soccer shirt, any soccer shirt, Bafana Bafana, our national team is good, on Fridays. And that’s starting to roll out. We’ve had the Deputy President launch it on the lawns of the Union Buildings. So those are things that are changing, that we are seeing in the psyche in South Africa.
Rafferty: I have read there’s been controversy over these stadiums, basically saying that they’re a huge money suck because in the end they’re going to be rendered useless after the World Cup, and I was just wondering what your opinion is on that.
Saunders: Some of them are going to be well used. For instance, the one in Cape Town is a prime location and an iconic city where we know when we worked on the business plan that conference organizers, race organizers, people who organize functions and events, main ones, looked forward to getting that facility and being able to use it. The trick to any of these is multiple sports that you can get in them and the alternative uses which you can get in them. So we feel Cape Town can go very well and one of the big pluses for Cape Town would be if the Western Cape rugby moved to the new stadium, which has been talked about, it’s been discussed in the press, but nobody knows whether or not it would happen. Because they have a stadium that’s too small, that could easily be sold for good property development rights and then make a move into the new one. So the things that could still happen to make these stadia even more long term viable. A stadia generally is a cost to a municipality, you know there’s only a couple of places like the soccer leagues in Germany and England that can have stadias that actually sustain themselves. So they often make a small operating profit or a small operating loss, they are sustained by subsides from the government side—it’s the extent of those subsidies and how much they would cost. And some of our stadia in the less prominent towns, such as Nelspruit and Polokwane, they may be the ones that struggle the most in terms of having on going reasonable levels of usage and reasonable levels of income. But they will be used on an ongoing basis.
Rafferty: Grant Thorton, at the beginning of your research, you estimated that the World Cup would contribute 55.7 billion rand to the South African economy and generate 415,400 jobs, and 19.3 billion rand in tax income to the government, and I was just wondering if you could tell me: Do those numbers still stand? Do you still estimate that’s what we’re going to see happen?
Saunders: Yes they do, the only area, because some of that expenditure has happened, it’s been a lot of the infrastructure spending. The only area that people could challenge if they wanted is the tourism spending which I mentioned at the beginning and since how we’ve build that up. But all the research we’ve looked at related to soccer and people following an event like this, is that recessions and things like don’t usually have much of an impact. They might trade down slightly, but they’ll not, not travel, so we fully expect the same levels of tourism and tourism expenditure as we had originally estimated. And to be quite honest, our estimates are probably on the conservative side because we know there’s certain information we just couldn’t get the information on, that’s being spent by some of the provinces, and some of the cities, and some of the sponsors. So being consultants we are slightly on the conservative side. So we wouldn’t change those numbers at all, and the employment generated as well, we wouldn’t change any of those numbers. We would stand by them and say, “Look they were on the conservative side, they are still a little bit on the conservative side.”
Rafferty: There’s going to be a bunch of people traveling to South Africa for the World Cup. What is one thing that you would recommend they do? And it doesn’t even have to be soccer related. What’s one thing you suggest they do when they come?
Saunders: It’s a difficult one, but I think the thing that has the most impact is if they can make it to a good game park and do some game viewing. You know African wildlife is stunning, the African Bush is stunning, it’s a very very different experience. And even if they can’t make it to one of the top game reserves, which would mean traveling in some instances quite a way, it depends where they’re based and where they watch their matches, we have lots of smaller wildlife farms nearer to the big cities, so take time to go and see some of our wildlife, it’s stunning.
Rafferty: Great. Well Gillian, thanks so much for taking the time to chat with me today, I really appreciate it.
Saunders: It’s a pleasure Michelle, thank you very much.