Return to South Africa isn't clear cut

14/07/2010
NEWS STORY

Despite Bernie Ecclestone's claims that F1 could return to South Africa within the next three years, local sources are not as convinced.

Clearly buoyed by the success of the World Cup, which confounded the critics even though the actual football rarely lived up to expectations, Ecclestone announced over the British GP weekend that he was in talks with officials in the country and that a circuit would be built - somewhere near Cape Town - within the next three years. That said, he insists that Russia - and all those billions of roubles - remain his priority.

However, the word out of South Africa is there is still a long, long way to go.

While a return to South Africa has been mooted for some time, the first serious talk began around five years ago when David Gant, who had recently formed the South African F1 Bid Company, told an investment conference in Cape Town that the sport could be back in the country in 2009.

"We have been working on this for about 18 months and each day we get more confident that we are going to pull it off," he said. "Formula One demonstrably want it to happen, they want it to come here."

The consortium behind the proposed Grand Prix bid was seeking government help, consisting of a contribution of 75 million rand (6.5m at that time) to help build a circuit, and a further subsidy of 50 million rand (4.4m), each year, for the next eight years.

"All we have to finalise from a South African point of view is the extent to which the government is going to participate in this public-private partnership," said Gant. "We hope to have finality on that within the next two months."

The news came in the same week that South Africa's entry in the newly announced A1GP series, one of the founders of the series, Tony Teixeira, being a South African.

Previously, African Renaissance Holdings (ARH) - a company aimed at "black economic empowerment" - revealed that it was to join forces with the Gant's consortium in an attempt to bring F1 back to South Africa. However, in addition to hosting a round of the world championship, ARH hoped that, in time, the country might produce a black driver capable of winning the title.

ARH was involved in a number of successful business ventures, not least a casino complex on Durban's Golden Mile beach. Its chairperson, Dr Vincent Msibi, who was clearly aware of the economic potential of a Grand Prix, in terms of tourism, employment and industrial development, was joined by Seth Phalatse, former executive director of BMW South Africa, Jay Naidoo, former Cabinet minister and now chairperson of the Development Bank of South Africa and Nolwazi Mdluli-Motlekar, former head of SA Tourism in London. Also 'on board' was Murray and Roberts, one of South Africa's leading construction companies, and One Vision Investments, part of an Iranian-based global conglomerate.

While Gant's bid appeared to fade away before reappearing again a year or so later, former F1 tester and A1GP chief executive Stephen Watson announced the formation of the Gauteng Motorsport Company which had been established by the Gauteng provincial government in order to attract investment and tourism to the province through international motor sport.

The first event in Gauteng Province - an economic hub of South Africa which contributes 35% of the country’s GDP and 10% of the African continent’s GDP - was the fifth round of the 2008/2009 A1GP Championship. However, months earlier, the Gauteng Provincial Government and the Renault F1 team had announced a partnership aimed at promoting Gauteng as the home of competitive sport. Indeed, hot on the heels of a Renault F1 Team Roadshow in Johannesburg - which attracted 80,000 spectators - a competition was launched in Gauteng Province whereby the winner would get a drive in the French team's 2007 car.

However, despite Watson's best efforts, in August 2009, Firoz Cachalia, Member of the Executive Committee for Economic Development for Gauteng Province announced that that plans for the F1 bid had been abandoned. At the time he said that this would not affect other motorsport contracts, namely: A1GP, the World Superbike Championship and Superstars.

However, in March this year it was announced that all contracts had been terminated. Referring to F1, he said: "An ongoing commitment to Formula 1 at this time would have required an investment of R7 billion (610m) over a 10 year period to acquire hosting rights.

"This would excludes infrastructure costs estimated at R2.4 billion (209m) and event management costs. Such costs could not be absorbed at provincial level without having an adverse impact on other priorities such as education and healthcare. Furthermore, to persist with this program in the face of the impact of the recession on revenue would have placed a permanent strain on the provincial fiscus."

The contract with A1GP - which was essentially dead and buried by then anyway - was terminated, as were contracts with World Superbikes and Superstars, though the provincial government had to meet its obligations and host two events already set down in the 2010 calendar. Even a deal with the BMW Sauber team first announced in March 2009 was cancelled, Cachalia revealing that potential liabilities under the contract were approximately R105m (9m) based on a three year period.

Gauteng Motorsport Company had been wound up in December 2009, with Cachalia now able to confirm that the cancellation of all contracts had saved the region R928 (80m) over the three years to 2012.

"I wish to reiterate that the decisions taken on Motorsport are aimed at ensuring that we channel all the available resources to our immediate priorities adopted by Gauteng Provincial Government which flow from our electoral mandate," he said. "I believe that the cautious but principled approach that was adopted has resulted in an outcome that serves the public interest."

Yet now, David Gant - who, other than experience in manufacturing and property development is head of Gants a leading South African agriculture and food processing company - insists that F1 can and will return to his country.

It's understood that land for the circuit has already been earmarked, though Bernie Ecclestone was saying this back in 2004.

"We are going to South Africa," he told Cape Town's Die Burger newspaper in November 2004, "it's not a question of if, it's only when.

"There will be a South African Grand Prix hosted by Cape Town within five years," he added. "It will be good for F1, for South Africa and the city. Plans are well advanced and I believe that the government may well become involved."

Speaking to Autodealer’s Nick Bates on Monday, Gant said: “South Africa doesn't have an international motorsport venue that can match up to the demands that F1 requires. We have further identified other sites since then that are well positioned and that could fulfil the requirements to build a world class facility but we're still a fair way from that.

“We haven't given up but following the success of the World Cup, Bernie is now very aware that we can do it, that we have the right infrastructure and, importantly, the passion.”

While he was unable to even hint at where the circuit might be located, he admitted that the ‘KwaZulu Natal region was under consideration but that Ecclestone remains "rather keen" on Cape Town.

However, there remains the problem as to where the money would come from, especially in light of the fact that F1 is still largely seen as a white elitist sport in South Africa.

The termination of the Gauteng Motorsport Company's contracts led to stiff penalties which its owners - the Gauteng Government - had to pay, the Democratic Alliance, the official opposition party to the ANC, crying foul when they saw what it was costing taxpayers.

Therefore, one has to wonder where Gant's consortium will find the money for the new track, not to mention Bernie's fees, especially in light of the Democratic Alliance's attitude towards the Gauteng bid.

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Published: 14/07/2010
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