eThekwini mayor Mxolisi Kaunda defends 'loss-making' Moses Mabhida Stadium

eThekwini mayor Mxolisi Kaunda responded to claims Moses Mabhida Stadium (MMS) is operating at a R228m annual loss.

ActionSA’s Alan Beesley, a member of the city’s council, recently claimed R275m had been spent on it in the financial year that ended in June. He said the stadium only made a total revenue of R47m, meaning it accrued an operational loss of R228m.

Beesley added that this year’s budget reflected a further R213m loss.

However, Kaunda said that was neither factual nor stated with the necessary context. He said the stadium, along with five other community stadiums, are integrated under the municipality as a business unit, so all its operating and capital budget requirements are funded by the city, while the revenue it generates annually forms part of the city’s income.

He said there was an annual asset depreciation of more than R133m in relation to R3.1bn invested in the stadium's construction in 2010.

“Each financial year, depreciation is budgeted for and therefore cannot be deemed to be a financial loss,” he said.

Kaunda said the stadium had, in fact, exceeded its targeted revenue.

“With respect to financial performance, a revenue of R32.3m was budgeted for. However, the actual revenue generated was R53m, which is R20.7m more than what was projected.”

That was partly due to it hosting high-profile events that drew national and global interest, including the certification handover event for the Zulu king and Monster Jam, among others. Recent soccer games are also expected to increase its revenue, such as the MTN8 final on October 7, Bafana Bafana's win over Benin on November 18 and the past weekend’s Carling Black Label Cup final.

“Just like any structure of the size of MMS, the maintenance being carried out requires a high level of operating and capital budget to sustain its operation and to comply with the requirements of the international football and event regulatory bodies,” said Kaunda.

“The facility has been vigorous in the implementation of cost containment measures to cap operating expenditure, with an intention to reduce the deficit.”

City manager Musa Mbhele added that the municipality would continue spending on the stadium because it was among the few in the country entrusted with big events and is a major tourist attraction.

“We have already done our reprioritisation of the budget and approved an allocation towards that for the next three years. We have even brought in an international contractor that was contracted to build the stadium in the first place to come and deal with the critical features of the stadium,” he said.

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