July 3 (Bloomberg) -- To the critics still questioning the billions South Africa spent on hosting soccer’s World Cup in 2010, Jason Blackman has an answer: Mobility.
His couriers now take just 14 minutes to get to the airport from Johannesburg’s Sandton financial district on a high-speed Gautrain rail link completed days before the first kickoff, down from more than an hour by road.
“There were a lot of naysayers who questioned South Africa’s ability to handle the World Cup,” said Blackman, sub-Saharan African operations manager for Deutsche Post AG’s DHL Express unit. “We proved them wrong.”
While Brazilians protested en masse against spending $11 billion on this year’s tournament, the 2010 event is still a source of national pride to many South Africans. The transportation improvements remain a boon to commuters in Johannesburg, the nation’s commercial hub, who previously relied on clogged roads plied by accident-prone minibus taxis.
“It was great having the 2010 World Cup here,” said Alexander Schirge, 42, a computer programmer who is no longer forced to drive for an hour to work in Sandton from the suburb of Melville. “There has been a definite improvement in public transport. I hate driving in Johannesburg. I feel it’s just a matter of time before you have an accident. Drivers are crazy. I’d rather sit and drink a coffee on a bus or read on the train.”
South Africa spent 30 billion rand ($2.8 billion) on hosting the month-long event, including 11.7 billion rand on building and renovating 10 stadiums, the government said in its final review, released in November 2012. The price tag excluded money spent on planned transport upgrades that were accelerated to cater for the influx of more than 300,000 fans.
The 2010 World Cup added 55.7 billion rand, or 0.2 percent, to South Africa’s gross domestic product that year, created 415,400 jobs and generated taxes of 19.3 billion rand, the government said in its 2012 assessment, citing research by accounting company Grant Thornton.
The returns are contested by Eddie Cottle, editor of “South Africa’s World Cup: A Legacy for Whom.” He says the tournament drew funds away from pressing priorities, such as providing decent housing, and mostly benefited FIFA, world soccer’s governing body, and wealthy citizens.
While the government has provided 2.8 million poor families with homes since apartheid ended in 1994, about 10 million people still lack proper shelter. Most are housed in more than 2,000 sprawling shanty settlements on the outskirts of Johannesburg and other cities.
“The government ran at an absolute financial loss in terms of hosting the World Cup because FIFA never paid tax,” said Cottle, a researcher at the Labor Research Center in Cape Town. As a rule, FIFA doesn’t pay taxes to the host nation. “I don’t think we benefited, save for a few improvements in the tourism infrastructure. We wasted millions of rand of public funds, especially on building and upgrading the 10 stadiums, which continue to be underutilized and run at a loss.”
The South African debate on the benefits of hosting the World Cup isn’t unique.
While Germany said the 2006 games earned the tourism industry an extra 300 million euros ($410 million) in revenue, added 2 billion euros to retail sales and yielded 50,000 new jobs, Hamburg University economics professor Wolfgang Maennig found it delivered no meaningful boost to the economy.
Academic research into so-called “mega-events” such as World Cups, Olympics and Super Bowls, found no evidence that benefits promised by organizers ever materialized, Dennis Coates, an economics professor at the University of Maryland, concluded in a 2010 study.
Danny Jordaan, who headed the 2010 World Cup local organizing committee, said the tournament helped counter negative perceptions about South Africa, boosted trade and investment and expanded the tourism industry.
“You cannot build a society that is focused only on building schools and houses,” he says. “There must be recreation. While we are concerned about addressing the social challenges, we must not use the platform that the World Cup creates for false arguments.”
The event’s most enduring legacy is the impetus it provided for the transportation-system upgrade.
The high-speed Gautrain began operating between Sandton and Johannesburg’s main airport in mid-2010 and was extended to the capital Pretoria the next year. More than 52,000 commuters use the 80-kilometer (50-mile) system daily, helping relieve road congestion.
“I was on the Gautrain the second day after it started running,” Charl du Plessis, executive vice president of exploration at gold and nickel producer Mwana Africa Plc, said in a June 23 interview. He now uses it once or twice a month. “It’s been fantastic. It’s a huge improvement over the old days when you had to drive to the airport and park your car there for a week.”
A 3.7-billion-rand bus service known at Rea Vaya, or “We Are Going” in the Sotho language, was introduced in Johannesburg in 2009. Its 277 buses have displaced 887 minibus taxis, providing residents of Soweto township southwest of the city a safer and more affordable mode of transport.
Rea Vaya buses run past the 94,736-seat FNB Stadium in Soweto, where Spain beat the Netherlands in the 2010 final. Built in 1987 and upgraded at a cost of 3.8 billion rand, the venue last year hosted 17 events -- including rugby matches, soccer derbies and concerts by U2, Justin Bieber and Rihanna -- and recorded an operating profit, according to Stadium Management South Africa, which runs the arena.
One contentious transport project was the upgrade of 185 kilometers of highways around Johannesburg and Pretoria. While the time it takes to drive the 67 kilometers between the two cities has halved, a decision to charge a toll outraged labor unions, road users and motorist groups. A commission is being appointed to investigate the effects of the e-tolls, Johannesburg-based newspaper Beeld reported June 28, citing the region’s Premier David Makhura.
“Twenty billion rand was spent in building the roads,” Wayne Duvenage, chairman of the Opposition to Urban Tolling Alliance, said by phone from Johannesburg. “That’s overpaying. The roads in Johannesburg city itself have not improved much -- in fact there has been degradation where potholes are formed, traffic lights don’t work and road marking are too faded. It’s got worse in the last four years.”
While the improved highways and reduced congestion have made commuting easier, the benefits have been offset by the toll fees and rising fuel prices, Blackman said in a June 12 phone interview. Even so, he sees the gains outweighing the negatives.
“People have seen South Africa’s ability to be able to handle-world class events and made aware that we do have decent roads and world-class airports,” he said. “There was a lot of positive spin. It gave a very positive projection of South Africa. The World Cup had a unifying effect.”