The Lesotho government is to slash its M2.45-billion budget for an “ambitious and fancy” stadium development after scrapping guarantees to a little-known private South African financier, according to a well-placed government source.
The source said the cash-strapped government would now provide all the funding and that in consultations with the sports ministry it had talked of slashing the budget by about 90%.
That would mean Lesotho would spend about just M245-million on the development, which originally encompassed a stadium, an indoor sports arena and an athletes’ village for the African Union Sport Council’s region five games in December this year.
However, the source said sports ministry officials had complained that the development needed more funding, and negotiations were continuing.
The drastic budget cut follows an exposé by the MNN Centre for Investigative Journalism (the Centre) of the government’s generous guarantees to obscure financier Property 2000 and the political connections of the contractors chosen for the project.
Four days after the Centre’s report, a team from United States Olympic and Paralympic Committee jetted in Lesotho to discuss the project and help Lesotho ensure that it is cost-effective.
The committee’s director, Dragomir Cioroslan, explained at a media conference in Maseru that the committee was acting out of friendship with Lesotho and a desire to see the country stage a successful tournament.
Also present was Sports Minister Mahali Phamotse who reiterated the government’s commitment to delivering the “best games ever”.
The new budget is expected to be unveiled to the public tomorrow (Wednesday), when Minister of Finance Moeketsi Majoro presents the 2020/21 budget speech to the Lesotho parliament.
When the Centre broke the story about the cancellation of loan guarantees to Property 2000 earlier this month, Minister Phamotse gave assurances on Lesotho Television and several radio programmes that the games would go ahead.
However, the question of how the development was to be funded remained the elephant in the room.
The finance ministry had earlier expressed its deep misgivings about the stadium development, complaining in a memorandum to cabinet that there had been no feasibility study and that the contractors had not been properly vetted.
However, it is understood that Phamotse had now succeeded in getting the finance ministry’s buy-in for the project to go ahead.
In an emailed reply to the Centre’s questions, Dr Majoro said: “I can confirm that Government is presently holding discussions on how best to host the games and various options are being examined.
“At some point in the near future, it will be possible to release definite information”.
A source privy to those discussions said that the government has discarded the idea of borrowing from private sources and will instead fund the project from its own purse.
This meant downsizing the budget. “Certainly, the construction won’t be as ambitious and fancy as previously,” the source said. It also meant that awarded contracts would have to be renegotiated.
The source said that the Cabinet budget committee held consultations with ministries on Friday last week.
“I heard an allocation has been made under the capital budget for construction-related projects for the games amounting to only about 10% of the previously solicited loan amount. This will surely be included in the budget speech,” the source said.
“However, officers in the sports ministry are complaining that 10% is not enough, and discussions on the budget continue even yesterday”.
The source said there would be some works at the site of the proposed stadium and arena at Lepereng, in Maseru, and at the National University of Lesotho, earmarked for athletes’ accommodation.
The Centre visit to Lepereng and at the university found only deserted excavation works, as contractors are still waiting for funding.
One of the contractors, Tayob Jooma of MFT Lesotho, who is under contract to construct the indoor sports arena, said he has no problem with the changes but that he may have to restart the design from scratch.
“But I assume the arena will not be affected, as it is the only part of the infrastructure that Lesotho doesn’t have and there is no alternative,” he said.
At the media conference, US Olympic committee director Cioroslan said the committee understood this was Lesotho’s first attempt to organise “an event of this international magnitude”. “We always have a first-time challenge in life,” he remarked.
“We feel that [the local organising committee] is very capable of delivering probably the best event of this nature ever organised in Africa. Your passion, desire and commitment to bring these events here will make that happen,” he said.
According to the president of Lesotho National Olympic Committee, ‘Matlohang Moiloa Ramoqopo, the committee’s visit was “to ensure that the plan is cost-effective” and help reduce the budget.
Asked to shed light on where the funding would come from, Phamotse said: “We are still working on this one and we have been asked not to say anything to the media”.
She said that “the government has not secured funds”, but would do so.
“We have to find ways of downsizing [budget] for the 2020 and upgrading for 2022 African Youth Games, and find how we can have the infrastructure that we need to deliver the best games within the means available,” Phamotse said.