World Cup 2010 stadium-building could hit problems

CAPE TOWN, Mar 7 (Reuters) Building stadiums for the 2010 soccer World Cup could create 107,000 jobs in South Africa but procurement issues and a shortage of raw materials may delay construction, a treasury official said today.

Malcolm Simpson, deputy director general at the Treasury's World Cup unit, said a shortage of skills, a lack of materials and rising costs posed problems for construction schedules.

''The risks of this project are high,'' Simpson told parliament's portfolio committee on finance.

''Raw material supply side constraints (are) high... On the procurement we considered this (risk) high as there was possible litigation due to poor tender evaluation techniques and preparation of tender documents.'' The government hopes the World Cup will stimulate growth in Africa's biggest economy by attracting hundreds of thousands of soccer fans and tourists. Questions have been raised over its ability to finish the huge project on time.

Simpson said a task team had been set up to help the nine host cities with procurement challenges, given an estimated 80 to 100 million rand would be ''burned'' by municipalities each month at the height of construction.

''This is significant work and it is believed that construction contractors will have to have two teams working 24 hours a day on these sites to ensure that the stadiums are constructed on time,'' Simpson said.

The government has pledged to pump a total of 17.4 billion rand (2.34 billion dollar) into preparations for the World Cup.

The bill is estimated at 8.4 billion rand for stadium construction and refurbishment and another 9 billion rand to upgrade a crumbling transportation system.

Aside from construction worries, South Africa also faces the daunting task of convincing the world it is tackling one of the highest crime rates in the world before 2010.

REUTERS PDS KP1952