Formula One to roar again in Africa

A South African consortium is determined to press ahead in its bid to stage a series of Formula One races in Cape Town from 2008 onwards.

An unlikely combination of media and construction companies is driving the process under the chairmanship of Dr Denis Worrall, former South African diplomat and chairman of Omega Investment Research, a consortium component along with Parallel Media, Murray and Roberts construction and BKS Engineering.

South Africa lost its Fl host status in the 1980s through anti-apartheid political pressure and sponsor bale-out.

Following indications from Formula One Management in London that South Africa would be a welcome addition to the club of nations hosting motor racing's most glittering happening, the syndicate has spent the last year lobbying for both government and private financial support. Formula One is the third most popular global sporting event after the Olympics and World Cup Soccer.

According to Worrall, enthusiasm for a South African FI Grand Prix is overwhelming and the newly-formed SA Grand Prix Bid Company expects to apply for the necessary licensing from Formula One Management this year.

Fl IS PHENOMENAL VALUE GENERATOR

The reason that backers are lining up and the government will also be persuaded to financially back the venture is because "the Fl Grand Prix has proven itself throughout the world to be a phenomenal value generator for the economies of those nations that host the event," says Worrall. "In South Africa's case the benefits of global TV exposure, increased foreign exchange, job creation and tourism more than justify the investment required to stage the race."

In terms of the bid, bigtime car racing's traditional South African home at Kyalami, halfway between Johannesburg and Pretoria in Gauteng, will be forsaken for Cape Town.

The original racetrack location was chosen to exploit South Africa's wealthiest and most populous region, but these days, say the bidders, Cape Town has a higher and more exciting international profile.

Negotiations with the Airports Company of South Africa and the Cape Town City Council are underway to site the track adjacent to Cape Town International Airport.

Cape Town's international tourist appeal and its popularity among Fl teams and their sponsors make South Africa's mother city an ideal venue for the event, Worrall maintains. The cost of building the Fl infrastructure is upwards of R350m ($58.3m).

The bid company proposes to create a public/private partnership to build the track and infrastructure and to promote the Fl Grand Prix and other international and domestic motorsport events. Bid company CEO Dave Gant says specific financing proposals have been tabled with national, provincial and local government and these will be discussed this year.

"We have already secured 50% of the funds we require from the private sector," says Gant, "and we have no doubt that if the government comes to the party, we'll secure the balance."

NOTJUSTBLOWINGSMOKE

Formula One relies heavily on its funding from cigarette companies keen to see their brands on cars, drivers' clothing and trackside billboards televised to millions of Fl fans globally, but the anti-smoking lobby is slowly but successfully turning the screws to diminish cigarette brand exposure.

South Africa is no exception; in fact, it has some of the toughest anti-tobacco legislation in the world, including a blanket ban on advertising in all its forms.

Other 'sin' products are also being squeezed and the government is coming under sustained pressure to exclude advertising and promotion of alcohol related products. This is bad news for South African sports, many of which rely heavily on beer, wine and spirit brands for much of their income. Castle Beer, South African Breweries' flagship brand, spends millions of rands a year on cricket, horse racing, soccer and many other sports.

So while South African tobacco companies have evinced an interest in coughing up millions in Fl sponsorship, the SA bid company can say goodbye to any government financial support if it accepts any of it. The company has applied to the government for a temporary dispensation of the anti-tobacco advertising legislation, but has no high hopes of succeeding, as Gant concedes. He remains optimistic, however, that the SA Grand Prix can become a reality.

"Mr Ecclestone (CEO of Formula One Management) has committed his company to South Africa and it may well be that by 2008 tobacco manufacturers will have disappeared from the spectrum of Fl sponsors," says Gant. "Only 50% of the teams have tobacco sponsorships even now, and there are three grand prix events that take place in a nontobacco advertising environment."

Worrall maintains that the Fl Grand Prix has the potential of injecting Rlbn a year into the South African economy and that proposed development of land adjacent to the track would create an additional 1,000 industrial sites.