The SEA in brief



The following are summaries of RDP, GEAR and MSDF principles; Games-related opportunities, limitations and risks; and critical conditions for ensuring that the Games-related opportunities are realised.

1. Principles: Promote economic development, investment and exports, and manage inflation, exchange rate fluctuations and government deficits.

* Opportunities:
- A unique opportunity for international exposure for Africa, Southern Africa, South Africa (SA), and the Cape Metropolitan Region (CMR).
- The bidding process and shortlist status have already raised SA and CMR's international profile. - Promote SA and CMR as an international tourist destination. - Promote international business interaction and confidence. - Enhance opportunities for public / private sector partnerships. The private sector has demonstrated a high level of commitment to becoming involved in the Bid and developed strong partnerships with the public sector.
- Provide accelerated expenditure for the CMR, and increase private and public investment in the CMR.
- The Games-related priority projects have led to accelerated investment for projects which otherwise would not have been undertaken. These include training venues and transport projects.
- Increase GDP and Gross Regional Product.
- Provide and upgrade infrastructure in the CMR. Upgrading transport infrastructure could enhance the long term economic development of the CMR.
- Increase local business opportunities.
- Increase competitiveness of local industries.
- Increase the tax base.
- Promote growth in the construction and tourist sectors.

* Limitations:
- Reduced increase in GDP and government revenue associated with productivity losses, interest repayments and inflation.
- Reduced surplus from the Games.

* Risks:
- The existence of an overarching government guarantee could reduce the incentive for the private sector to contribute towards the financing of the Games and increases the risk of a government deficit occurring.
- Allocation of public funds to the Games could result in the diversion of public funds away from basic needs projects at a national and regional level.
- Interest repayments on government borrowing to finance expenditure could increase the overall costs to government, reduce the projected surplus and compromise national policies to reduce the deficit.
- Associated increases in the interest rate could result in the crowding out of basic needs investment.
- Increase in inflation due to capacity constraints in the construction industry.
- Budget overruns and shortfalls could result in tax increases to cover costs.
- Appreciation of the exchange rate due to an increase in foreign exchange (temporary Dutch disease) could reduce the competitiveness of small and medium export sector.
- Increase in prices in the service and property sector due to the increase in tourism.
- Adverse weather conditions could have an adverse affect on CMR's profile as a tourist destination.

* Conditions:
- Minimum private sector target contribution of 35% to Games capital expenditure.
- OCOG should be structured to maximise private sector involvement and ensure that national public finance objectives are not compromised by Games-related spending.
- Government should provide stable monetary and fiscal environment.
- Independent commission set up to monitor performance of OCOG and Games-related public spending.
- International and local programmes implemented to reduce capacity constraints in the construction sector.
- OCOG should be set up as an independent body.

2. Principles: Create jobs, promote empowerment, human resource development, SMMEs and ABEs.

* Opportunities:
- Games will create jobs in the construction and tourism sectors.
- Opportunities for empowerment of historically disadvantaged communities in planning and implementing the Games.
- The OBC organisational structure of 60% of staff and 40% of management from the disadvantaged sector represents a commitment to empowerment.
- Create opportunities for involvement of SMMEs. Involvement of construction sector SMMEs in the priority projects to date has been good.
- Provide for the development of multi-skilling and training programmes for historically disadvantaged communities, specifically in construction, tourism and communications.
- Provide opportunities for partnerships between previously disadvantaged and established local and international firms, and transfer of skills and knowledge.
- Increase in tourist profile will increase long term employment opportunities in the tourist sector.

* Limitations:
- Number of employment opportunities provided by the Games is likely to have been overstated.
- Majority of jobs created by the Games is likely to be in the lower skilled and lower paid category.
- Majority of tourism jobs are likely to be seasonal and temporary.
- Unemployment in the construction industry will increase after 2004.
- Games are unlikely to make a significant contribution to providing sustainable jobs, unless lasting economic growth results from the Games.

* Risks:
- Opportunities for SMME involvement may have been overstated and barriers exist preventing effective involvement at higher levels.
- SMME involvement is compromised by the format of the tender process and complexity of the documents.
- Measures and policies for human resource development are uncoordinated and negligible.

* Conditions:
- OCOG, in conjunction with government, should develop and implement a co-ordinated programme for human resource development.
- OCOG should develop and implement appropriate training, labour protection and quality management programmes.
- OCOG should ensure that Games-related tender and contract documents enable effective involvement of SMMEs and ABEs.
- OCOG staff profile should, as far as possible, reflect the demographic structure of SA's population.
- OCOG must be open and transparent with regard to the manner in which contracts are awarded.

3. Principle: Basic needs.

* Opportunities
- The semi-dispersed nature of Games will provide much needed facilities in the historically disadvantaged areas. These facilities will be used as multi-purpose community facilities after the Games.
- Due to the priority projects, a number of these facilities will be provided even if the Games are not awarded to Cape Town.
- The infrastructure and basic services associated with the venues will be upgraded.
- The transportation system and public transport will be upgraded.
- Mobilising funds for otherwise unaffordable projects.

* Limitations:
- The Games will not directly provide low-cost housing. ,br> - The transportation upgrade will not improve accessibility to work opportunities for disadvantaged communities as much as might have been expected.
- distances to the workplace will not be significantly altered in the short term.

* Risks:
- The allocation of public funds to the Games could displace funds at a national and regional level from basic needs and RDP-related programmes.
- The multi-purpose halls may not adequately meet the needs of the surrounding communities.
- High maintenance costs may affect the economic viability of some of the multi-purpose facilities and result in "white elephants".
* Conditions:
- Government must monitor the impact of Games expenditure on the allocation of public spending for all basic needs projects at a national and regional level.
- OCOG must involve communities in planning for post-Games opportunities in order to ensure that the facilities meet community needs.

4. Principles: Restructure the metropolitan region and integrate urban areas and redress unequal distribution of access to facilities and opportunities.

* Opportunities:
- The semi-dispersed nature of the Games will establish a number of multi-purpose facilities and upgrade infrastructure in some historically disadvantaged areas. These facilities may in turn act as a catalyst to attract future public and private sector investment to these areas. Due to the priority projects programme, a number of these facilities will be established, irrespective of whether Cape Town is awarded the Games or not.
- 74% of the training facilities and seven competition venues are located in historically disadvantaged areas of the CMR.
- The existing housing proposals, the largest single investment in housing in the CMR to date, are financially viable and provide an opportunity to involve the private sector.
- Games-related investment at Wingfield and Culemborg may lead to urban renewal in the surrounding areas.
- The location of the major competition venues in the relatively more affluent areas does improve the financially sustainability of these facilities.

* Limitations:
- The bulk of the expenditure on the Olympics facilities will be spent on the major competition venues, particularly Wingfield and Culemborg, which are mostly located in the relatively more developed areas of the CMR. While there are good reasons for the choice of these venues, this investment pattern serve to reinforce the existing spatial patterns of the CMR.

* Risks: - The development of competition facilities to IOC standards may make it difficult to ensure the sustainability of the facilities in the long term. Maintenance and operation costs associated with some of the competition and training venues could render their long-term operation uneconomical. These venues could become "white elephants".
- Possible gentrification (upgrading) and increased property prices and rates associated with the Games could contribute towards the displacement of lower income groups.
- The establishment of facilities/venues on their own is not sufficient to guarantee future public and private sector investment in the area.

* Conditions:
- OCOG, in conjunction with local authorities and communities, should establish an effective mechanism to ensure that adequate funds are allocated for the maintenance and operation of facilities/venues after the Games.
- Metropolitan and local authorities should develop strategies and programmes to promote investment in and around the multi-purpose facilities in the disadvantaged areas.
- OCOG, in conjunction with the metropolitan and local authorities, must put in place mechanisms to protect tenants' rights and prevent displacement.
- OCOG, in conjunction with the metropolitan and local authorities. should consider possibilities for cross-subsidisation for the provision of low -income housing, especially at Wingfield.
- OCOG should create mechanisms to ensure that its housing proposals keep in touch with the market.

5. Principles: Create and promote the use of a viable public transportation system.

* Opportunities:
- The Games may serve as a catalyst for implementing the "Moving Ahead" transport plan for upgrading the CMR's transportation system. This is likely to enhance the long term economic performance of the CMR.
- The transportation upgrade will serve to improve the potential mobility of the people living in the CMR and improve the region's public transportation system.
- R250 million will be spent on transport priority projects irrespective of Cape Town getting the Games or not.
- According to the MTP, 65-80 % of the "Moving Ahead" budget will be spent in the historically disadvantaged areas of the Metro South East.
- The Games will provide an opportunity to replace old trains which are reaching the end of their life-span.
- The Games will provide an opportunity to upgrade the public transportation system by improving security on the trains and at stations.
- A Metropolitan Operation Centre will be established in preparing for the Games to manage and co-ordinate transport.

* Limitations:
- Transport infrastructure is unlikely to significantly reduce average trip distances in the short term.

* Risks:
- Transport infrastructure, focused on Olympic requirements, may not be optimal in terms of the long term requirements of the CMR.
- The R7 770 million earmarked for upgrading the transportation system represents massive costs to the public finance system. The allocation of this sum of money may impact on the availability of funds at a national and provincial level for other transport and basic needs related projects.
- The allocation of R 7 770 million may compromise the government's ability to manage the deficit.
- Cape Town's current public transportation infrastructure is the best in South Africa. The allocation of public funds to upgrade the CMR's transport infrastructure may compromise other cities' ability to secure public funding to upgrade their infrastructure in the future.
- The large-scale investment in infrastructure will involve increased maintenance costs. In the absence of effective cost recovery systems, these costs may be borne by taxpayers.
- The transport improvements are expected to only marginally improve accessibility to work opportunities in the short term (though investment in transport may in the long term lead to new job opportunities closer to where people live).

* Conditions:
- The metropolitan authorities should demonstrate the political will to promote public transport as an efficient and safe alternative.
- The metropolitan transport and rail authorities should ensure that effective cost recovery systems for rail-based transport are developed and implemented.
Public transport should be marketed more effectively.
- Travel demand strategies should be implemented in parallel with improving the public transport system.
- Effective law enforcement to prevent fare evasion and improve safety and security on trains should be put in place.
- Government should investigate the impact which spending the full R 7 770 million on transport would have on the ability of local and national government to address other basic needs throughout South Africa.

6. Principles: Promote environmental awareness and sustainable use of natural resources.

* Opportunities:
- The Games offer an opportunity to promote environmental awareness and measures to limit human impact on the natural environment.
- The Games could act as a showcase for environmentally friendly technologies.
The creation of an Environmental Charter is likely to increase awareness of environmental issues and appropriate government procedures.
- The creation of an Environmental Commission may encourage local authorities to develop environmental policies and improve management practices for the CMR.
- The environmental principles developed by the OBC, and contained in Theme 4 of the Bid Book, are progressive.
- The siting of Olympic venues was informed by the MSDF. Many competition venues will be based on existing facilities, thus using fewer resources and minimising the "footprint" of the Games.
- EIAs have been carried out for the priority projects.
- Initial environmental investigations have been carried out for the remaining facilities, including Wingfield and Culemborg.
- The Games provide potential to create formal conservation areas (as a part of Olympic facilities) to conserve important vegetation communities.
- The Games may provide an opportunity to encourage people to use public transport. In the long term this could contribute to improving air quality in the CMR.
- The use of zero-emission buses for the Games could promote a "clean air consciousness".

* Limitations:
- Full EIAs have not been undertaken for competition venues outside of the priority projects, including Wingfield or Culemborg.
- Government authorities (national, provincial, metropolitan and local) lack capacity and coherent environmental policies.
- No database exists on the natural resources of the CMR.

* Risks:
- Additional water resources and water purification and waste disposal facilities may be needed at least six months earlier than would have been the case without the Games.
- The rowing course at Wingfield and the slalom course on the Berg River are likely to have a negative impact on the environment.
- There could be a negative impact on indigenous vegetation (Sand Plains Fynbos) at Wingfield; while the potential to restore indigenous vegetation (Cape Strandveld and Sand Plains Fynbos) could be lost at Belhar, Philippi and Mew Way.
- There is a risk that, without appropriate control mechanisms put in place by local government, certain sensitive areas could be impacted upon by the increased numbers of visitors to the CMR.

* Conditions:
- Metropolitan and local authorities must demonstrate the political will to address environmental issues in the CMR and increase environmental management and monitoring capacity.
- OCOG should develop and implement procedures for ensuring that the environmental recommendations and specifications drawn up by the OBC are implemented for all Games-related projects.
- The Environmental Charter should be finalised and endorsed by local and metropolitan authorities.
- Should the Bid be successful, an Environmental Commission should be established as soon after September as possible, to oversee the implementation of the Charter and the environmental performance of OCOG.
- Metropolitan and local authorities need to develop and implement environmental policies for the CMR, and should ensure that appropriate control mechanisms are implemented for sensitive environments.
- OCOG should ensure that EIAs are carried out for all competition facilities.
OCOG should ensure that Environmental Management Plans are implemented for all significant construction activity.
- Local and metropolitan authorities should undertake an inventory of natural resources in the region as a tool for optimal management of the environment.

7. Principle: Nation-building.

* Opportunities:
- Unique opportunity to foster nation-building in South Africa.
- Potential to address sporting inequalities created by decades of segregation under apartheid.
- Inspire the youth of South Africa.
- Heal divisions between communities.
- Promote national pride in South Africa.
- Participate in an "African Renaissance".

* Risks:
- If the Games are not seen to benefit the country as a whole, there is a danger of the Games becoming a divisive issue that would serve to create tensions rather than break down barriers.
- The perception may exist that the Games will only benefit a privileged few.
The perception may exist that the Western Cape is benefiting at the expense of SA as a whole.

* Conditions:
- OCOG, in conjunction with national, provincial and local government, must ensure that the Games are seen as a truly national event that has significance for the whole of South Africa and not only the CMR.
- National government should take appropriate measures to promote the Games in the rest of Africa.
- OCOG must put in place a process for keeping all South Africans informed about the preparations for the Games.
- OCOG and the government should implement the appropriate measures to ensure that the Games themselves are accessible and affordable to the average South African.

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Posted by the Olympics Assessment Team of the Stategic Environmental Assessment of the Cape Town 2004 Olympic Bid.
Email inquiries to the team from this point, or refer to the contact details above.