MEC Cachalia defends F1 decision

Wednesday, August 12, 2009

Johannesburg - Gauteng Economic Development MEC Firoz Cachalia has defended the province's decision not to proceed to acquire the rights to host Formula 1 events.

This, amid claims that the F1 bid campaign has already cost more than R2.4-million, spent on a feasibility study for an F1 track at Kyalami.

Among the allegations, brought up by the Democratic Alliance (DA), is that the provincial government, under Premier Paul Mashatile, had spent about R600 million on motor sport projects that have "done little" for Gauteng residents. 

The motorsport projects, which are managed by the Gauteng Motorsport Company, include a bid to get Johannesburg on the Formula 1 circuit, included as a leg of the A1 Grand Prix, and made a venue for a Super Bike World championship race.

MEC Cachalia announced last week that the province would no longer bid for the rights to host F1, citing the current economic crisis as the reason.

The decision created an impression that money was being spent on projects which may not benefit the province.

"The Department of Economic development has undertaken a process of reprioritisation and rationalisation of its budget...this is in the context in which the decision to announce that we will no longer proceed to acquire rights to host Formula 1 at this time," Mr Cachalia said.
He said due to the economic crisis, the provincial government could not at this stage bid to host the Formula 1.

Mr Cachalia said the decision not to proceed with the F1 bid did not affect other motorsport contracts such as the A1 Grand Prix and the Superbike World Championship. These contracts remained unchanged and will continue to be managed by Gauteng Motorsport Company.

He said Gauteng was home to a number of motor manufacturing companies and that the motorsport projects would expose the province to a wide range of manufacturers associated with motorsport internationally.

Mr Cachalia conceded that there was nothing irregular, as claimed by the DA, about the contracts associated with motorsports.

"Prior to entering into each of the contracts, a thorough assessment of the direct and indirect economic benefits derived from hosting these motorsport events has been conducted using expert knowledge," MEC Cachalia said. 

He acknowledged that the costs of the projects were too high but said the economic benefits outweighed that factor.

The entire motorsport projects, he said, were under review in light of the decision not to proceed with F1. 

"It is possible then that we may explore ways to see how those figures can be brought down," he said.