5 May 2011
The Cape Town International Convention Centre (CTICC) is set for a R4.5-billion expansion that will include the creation of 10 000 square metres of retail space, a hospital, an office tower, numerous basement parking bays and the regeneration of Founder’s Garden.
Funding to create a “convention precinct” is being sourced from the CTICC, the City of Cape Town and the Western Cape Provincial Government, and the development will create more than 8 000 jobs annually by 2018.
According to CTICC chief executive Rashid Toefy, there is a strong business case for the expansion, which will unblock construction and development opportunities in the precinct and have a multiplier effect on the economy.
A recent feasibility study by the University of Cape Town’s Graduate School of Business on the impact of the expansion found that its contribution to the national economy could rise from the current R2.3-billion to over R5.1-billion annually.
The centre was developed in 2003 at a cost of R565-million, with funding from the City of Cape Town, the provincial government and SunWest. The City contributed R284-million of that, giving it a 50.18% majority shareholding and making the centre a municipal entity.
While it was originally envisaged to be a loss leader with the city merely covering its operating costs, the centre has outperformed those expectations be becoming a profit centre in its own right.
“Both operating and capital costs are being recovered, it has paid rates, never needed any further funding from [the city council] after the original investment and has even been in a position to pay a dividend although this has never happened,” said Cape Town’s mayoral committee member for economic development and tourism, Felicity Purchase, at the announcement in Cape Town last week.
“It is a wonderful example of a successful partnership between business and government.”
The City approved funding of R550-million towards this venture over the 2012/2013 and 2013/2014 financial years, as well as R150-million for the purchase of various land parcels and related statutory processes.
Since opening its doors in 2003, the centre has contributed to the creation of more than 53 000 direct and indirect jobs and has made a cumulative contribution of over R14-billion to the national gross domestic product (GDP) and over R4-billion to gross geographical product (GGP).
The CTICC is already the leading convention centre in Africa. At present it is ranked 35th in the world, but aims to be in the top 10.
“The CTICC has over the years become the flagship events and conference venue in the City,” said Cape Town Mayor Dan Plato. “I am certain that the expansion will bolster the City’s goal to be the destination of choice in Africa.”
SAinfo reporter
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