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 Posted by ESPN Staff
Oct 23, 2008

World Cup plan on track but costs a worry

CAPE TOWN, Oct 23 (Reuters) - South Africa is on track to build stadiums for the 2010 soccer World Cup but rising costs are a concern, a cabinet spokesman said on Thursday.

South Africa is the first African nation to host the prestigious tournament, but a global credit crisis coupled with slowing domestic growth and higher prices for building materials have stoked concerns about rising costs.

The country's Treasury provided an extra 1.4 billion rand ($126.3 million) to cover cost overruns in its medium-term budget this week.

Economists say South Africa may struggle to raise cash to fund massive infrastructure plans ahead of 2010 given inflated borrowing costs due to the global credit crunch.

"(The) construction programme for the stadia was on track to meet all FIFA deadlines even though cost escalation still remains a challenge," Themba Maseko, cabinet spokesman, said in a statement.

South Africa originally budgeted about 17.5 billion rand for the construction and refurbishment of 10 soccer stadiums and other infrastructure for the 2010 tournament.

Finance Minister Trevor Manuel said on Tuesday the additional 1.4 billion rand would be made available for cost overruns, with another 600 million rand to improve internet connectivity between the stadiums and the national network.

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