The bid to bring F1 racing to South Africa

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JIMMY MOYAHA: You’ll remember a couple of months ago I had a conversation with Toby Venter, the chair responsible for the Kyalami race circuit, around potentially bringing Formula 1 to South Africa.

At the time, Minister of Sports, Arts and Culture Gayton McKenzie had mentioned supporting that initiative from a government perspective.

We have a new development in the Formula 1 space. The team at Blue Mountain Racing has announced that they intend to develop a R6.7 billion motorsport complex with its own F1 grade circuit in the Western Cape.

We are going to take a closer look at this with the executive chair of Blue Mountain Racing, Neal Froneman. He joins me on the line now to see what we make of it.

Uncle Neal, lovely having you back on the show. I haven’t spoken to you since you retired from Sibanye-Stillwater. It’s good to see that you have found a way to keep yourself busy in this time. Why Cape Town? Why the Western Cape for this particular project?

NEAL FRONEMAN: Let me take a step back.

What is critical to Formula 1 is it’s no longer just a race, it’s a destination.

Therefore you have to look at positioning in a much bigger way than just the race track.

Now of course, if you look at Africa, there are not many places that the rest of the world wants to visit. But one place that is really popular – and it’s a city that’s been voted the best city for seven years in a row internationally – is Cape Town.

You know, you have the beauty of the Cape, you have a province that runs well, you have the backdrop of Table Mountain, you have the culinary issues with wine farms, and of course you also have some very interesting historical landmarks such as Robben Island.

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So it’s a brilliant, brilliant destination for a Formula 1 event.

It’s a place that the rest of the world wants to visit.

We spent the first six to nine months identifying a site that would comply with Formula 1 requirements. It has to be within 30 minutes of an international airport. You need space. One of the problems with Kyalami is that it’s landlocked.

We’ve acquired 600 hectares with a beautiful backdrop. It’s in the Swartland.

Our property is right next to Kalbaskraal, which is also very important because when you look at the number of employment opportunities that a venture like this creates – and we’ll talk about the venture, it’s not just a race track – you need access to labour.

Of course in South Africa one of the most important things we can do – and that’s where this conversation started – is to create jobs, not hand out social grants; but to provide dignity to those people who are poor and benefit the most from a job.

So when you pull all of that together, we’ve been able to position this track probably where as a circuit designer you can’t design this; it comes with the territory. So we are very pleased with the positioning.

But it’s next to Kalbaskraal in the Swartland, 30 minutes north of Cape Town on the N7.

JIMMY MOYAHA: Uncle Neal, you touched on the impact that this has to have on jobs, on the local economy. I want to look at that. We have for the longest time debated the commercial aspects of hosting Formula 1, whether we’re hosting it in the Western Cape, or at Kyalami. But the overarching conversation has always been about the longer-lasting potential impact this has.

Can we look at that and look at how this complex that you have proposed could sustain the economy around it because it is, as you said, more than just about the race day itself and about the race weekend itself?

NEAL FRONEMAN: Yes. First of all, let me tell you a bit about the complex because, as I say, it’s not just a race track.

A race track on its own, even if it’s efficiently used, is a risky investment.

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So we’ve had to apply our minds to mitigate the risks of attendance figures and ticket prices. You just don’t know exactly what they will be on the day of the race.

Therefore what we have set about doing is building an entertainment destination, where the catalyst is a race track.

We will incorporate an amphitheatre. If you recognise that Formula 1 is owned by Liberty Media, people like Taylor Swift, Beyoncé, and these types of artists are also part of their menus, if I could call them that.

Entertainment is a very important part of this destination.

In addition, it’s pretty well known that Cape Town has run out of facilities for conferencing.

The Waterfront Convention Centre is just about fully booked, so we will incorporate and utilise things like the pit and the media buildings for things like conventions. They will have duplicate functions.

And then of course, there’s a growing number of high-end customers who look for the positioning of houses and things on race tracks where they can legally take their supercars onto a track and race them on weekends, et cetera.

So it becomes a catalyst to a very high-end real estate development.

The other modern trend is the establishment of what we call ‘trackside condos’. Silverstone is a good example of where people buy high-end condos right on the track.

In Monaco you’ve got it naturally occurring, because it’s a street race, but that same vibe can be created by establishing high-end condos right on the race track.

So we diversify the risk of building this complex. Think of it almost as a new [V&A] Waterfront.

It is on a lake; it will be a man-made lake. And now when you have that as the context, first of all, let me say it is going to cost R6.7 billion. The track is R2 billion of that, the rest of the infrastructure the balance.

Now, during the construction phase – and these are not permanent jobs – you create about 15 000 construction-phase jobs.

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But through the life of this project – and remember you don’t do this for a five- or 10-year life, this is a 40/50-year sort of vision – there are 15 000 direct and indirect operational jobs.

Now, these are things that, through things such as tourism and all the ancillary businesses, get created to support an initiative like this.

And then we’ve also estimated that in a race week we create 8 000 temporary jobs.

So this is enormous in terms of scale and what it creates in terms of impact and indirect benefits through the country.

That is why you would find even organisations like the IDC [Industrial Development Corporation] have a mandate to invest in projects like this because of the benefit of tourism and what it creates in knock-on industries.

Read: Tourism consumption triples, can it now reach R1trn?

The other benefit of course for Cape Town is that you have the ability for cruise ships to come in and for people to live on cruise ships during these events and travel to the site.

So there are so many benefits and knock-on benefits from this project. But that gives you an idea of the scale of jobs created: 15 000 direct and indirect operational jobs.

JIMMY MOYAHA: South Africa is not only capable and willing to host a Formula 1 Grand Prix, but we may also be very capable of doing it on two circuits. I think Spain may be the only other country at the moment that has two Grand Prix circuits available. We’ll see how this unfolds.

It certainly has my support, having been a Formula 1 fan growing up, but we’ll hope that the rest of the support required to have this project come to life is made available.

We’ll have to leave this conversation on that note. Thank you so much to Neal Froneman for joining us to look at the R6.7 billion motorsport complex that he and his team are currently working on.

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