He presents evidence on how the City of Johannesburg ceded the profits it will earn from the World Cup to a little-known company called National Stadium SA (NSSA) and other disturbing aspects of the contract. Here, Rob Rose explores tendering irregularities surrounding the contracts for Soccer City in Johannesburg. Instead, the objective is to provide readers with an accessible, stimulating and exploratory documentation of some of the more controversial aspects of the 2010 World Cup.Ĭhapter 2: Soccer City: What it says about the murky world of government tenders It does not aim to present a set of proposals for reform or a set of ‘best practice’ recommendations. These are some of the ethical governance challenges that are explored in the report.
Preventing corruption in the procurement of these contracts and throughout the duration of the projects can save millions in inappropriately diverted, potentially squandered or looted public funds and help ensure the best quality infrastructure for poor and vulnerable communities in host countries. Apart from eroding public trust and a country’s global reputation, it can result in more expensive financing and capital and maintenance costs, the misappropriation of funds, or inappropriate financing, unviable and defective projects, or environmentally and socially destructive projects. However, the costs of corruption are high, argues the report. If mega-events make governments expedite the spending of public funds efficiently and advance much-needed infrastructural projects and other important social services, surely they act as catalysts for economic and social development? If the means can justify the end perhaps it is acceptable to side-step democratic governance and accountability?
‘Why should these varied and seemingly unrelated observations about the 2010 World Cup concern us?’ the report then asks. A situation may arise, where FIFA is in a powerful position to advocate its own interests and get officials from the host nation to change its policies even if it conflicts with the public interest.
The corporate interests of FIFA and the public interests of the host nation might not always align perfectly. The use of sub-contractors, sub-sub-contractors and different suppliers makes oversight very difficult and facilitates corruption, bribery, extortion and fraud.Ĭonflicts of interest with regards to mega-events can also happen when the different actors have contesting interests. Thirdly, the nature of the construction industry is notoriously corrupt, according to Transparency International. This creates the opportunity for officials to argue that they cannot afford to look around and thus award contracts to companies they ‘know’ and ‘trust’. Secondly, time is often limited in construction related to mega-events such as the World Cup, where the host nations must ensure that stadia and infrastructure can live up to FIFA’s standards within a relatively short time limit. This means that bribes and inflated claims and costs are easier to hide in these large- scale projects. It is difficult to get an overview of the spending and changing market costs makes prices difficult to compare. There is ample opportunity for corrupt individuals to influence outcomes through bribes, fraud and extortion, thereby increasing the risk of conflicts of interest and, ultimately, corruption.Īccording to the report, three factors make large construction projects vulnerable to corruption.įirstly, the sheer financial magnitude of public funded infrastructure projects, such as we see in South Africa up to the World Cup, makes the concealment of corruption much easier. The FIFA World Cup is thus a catalyst for competition – not only among football stars, but also among the many private and public contenders for the multiple tenders that flow from these highly financed events. The infrastructure projects generate lucrative construction and tendering contracts, which are often financed by host nations and their governments. The business opportunities that stem from the world’s biggest sporting event are plentiful. South Africa expects to gain a lot from the competition, both in economically and this socially, as visitors will come and spend their money, but also image-wise as all eyes turn to South Africa. Its magnitude warrants the title of mega-event, which are associated with large-scale economic impacts on the host country. South Africa is host to this year’s FIFA World Cup, which is the biggest media event in the world. Eight different journalists and researchers contribute to the report through six detailed case studies, which highlight how the dynamics particular to mega-events can generate ethical conundrums and complexities that confront current and future policy makers and host nations.
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