President's Blog

In 2010, the FIFA World Cup will be held in South Africa. In preparation for the global soccer championship tournament, the nation is spending literally hundreds of millions of dollars to improve its infrastructure. A significant portion is dedicated to new stadiums or reconstructed stadiums in Cape Town, Port Elizabeth, Durban and Johannesburg. Recently, I had the pleasure of visiting a number of these that are under construction. They are clearly technological and architectural achievements.

A significant portion of expenditures is going to airport improvements to handle the anticipated international guests. A new greenfield airport is being built just north of Durban. This project has been in the planning stages since the 1970s. The approaching World Cup has provided the impetus to get the project completed.

Numerous highway, rail and bus improvements are also taking place. Although not a direct result of the 2010 World Cup, South Africa is constructing a new commuter rail line called the Gautrain, from Johannesburg to Pretoria. Conceived in the 1990s, the project has received the funding to move ahead. Nearly 80 kilometers (50 miles) of railway will be built, with 10 stations. Much of the line will be either at or above grade, while underground tunnels will account for 15 kilometers (9.3 miles). To achieve its goals, the project has the world’s largest precast yard, where all of the pieces for the 10.5 kilometers (6.5 miles) in viaduct segments are being constructed. The total cost is in excess of U.S. $6 billion.

The economic impact of this expanded public transit will be significant. Attention is being given to development around the 10 stations. It is hoped that the Gautrain line will provide a major commuter alternative for traffic traveling between Pretoria, South Africa’s capital, and Johannesburg, their major economic center and largest city.

Much of the spending is on projects that will provide transportation, air and other infrastructure benefits long after the World Cup. The question remains, "Will sufficient visitors be attracted to South Africa so that the planned economic stimulus will be realized?" One clue to the answer could be found in a South African Airways magazine article that described the impact on Germany after it hosted the global soccer tournament in 2006. Germany saw its tourist bookings increase by a third, while unemployment was reduced by 20 percent, fostering strong impressions around the rest of the world that Germany reinvented itself, according to the article. Clearly, Germany's World Cup experience has been the model for the South African effort. Hopefully, all of this investment will provide the anticipated dividends.