Have all the World Cup expenses been counted?

Airports Company SA, “ACSA”  now has some of the highest fees  in the world. Apparently they need to fund the huge “investment expenditure” incurred  in upgrading on our airports recently for the World Cup.

This begs the questions:

  1. What business plans were used in determining investment on our airports?
  2. How did actual experience compare to those budgets?
  3. What can we and ACSA learn from the difference between expectations and actual?
  4. Did the marketing benefit of the World Cup more than offset the de-marketing impact of higher costs of travel to (and inside) South Africa?
  5. Have these “investment expenditures” been capitalised on ACSA’s balance sheet and has the resultant asset been impaired or not?
  6. Have these additional costs been added to the official costs for the World Cup (and why not?)

Who am I kidding –  huge sums of money were spent on the gut feel that it was a good idea and because spending other people’s money is easy and it’s self-glorifying to build grand airports.

Published by David Kirk

The opinions expressed on this site are those of the author and other commenters and are not necessarily those of his employer or any other organisation. David Kirk runs Milliman’s actuarial consulting practice in Africa. He is an actuary and is the creator of New Business Margin on Revenue. He specialises in risk and capital management, regulatory change and insurance strategy . He also has extensive experience in embedded value reporting, insurance-related IFRS and share option valuation.

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