A
standing joke in the Formula 1 paddock is that the sport races on all
continents save Africa and Antarctica – and the latter will be
first to plug the gap even if a Grand Prix around the Bay of Whales
or up the Heiberg Glacier taxes Pirelli's softest compounds to the
absolute limit.
That
said, Africa regularly hosted Grands Prix on its southern-most
country until 1985 - when F1 bowed to the inevitable and withdrew the
South African Grand Prix from the calendar in the face of enormous (and
justified) pressure from anti-apartheid activists. Ironically, South
Africa's replacement was the Hungarian Grand Prix - staged in a
country under communist rule, without a word of protest…
Since
then, F1 returned to Kyalami twice: in 1992/3. Tellingly, the events
were staged before Nelson Mandela was elected president and both were
run on the tighter, anti-clockwise layout built in 1987 rather than
on the traditional high-speed racetrack of which old-timers speak so
wistfully. Indeed, the two circuits could hardly be more different in
character despite having some sectors in common.
Since 1993, numerous attempts have been made to return F1 to South Africa, usually at Kyalami although Cape Town has (thrice) been mooted - including a 2014 project led by Anthony Hamilton, father of Lewis - as was a circuit situated alongside the airport on the outskirts of Durban. All came to nought for the simple reason that local and national governments would not (could not?) commit funding to the projects.
Kyalami constantly referenced for a return
Still,
whenever F1 seeks bargaining chips in talks with other venues,
references to Kyalami are trotted out; ditto when Lewis Hamilton is
asked where he'd like F1 to race next. Result: sensationalist
reporting from folk who don't even know the origin of the name or
that some of the best-known sectors were consigned to an industrial
park during the 1987 remodelling. Lest you're wondering: 'Kyalami'
translates as 'My home' in Zulu.
"Every
time Lewis or Stefano (F1 President Domenicali) mention Kyalami the
media goes into hyperdrive," a source close to the situation told
RacingNews365.com during a recent visit to South Africa.
"None of this
speculation is helpful to the cause as it raises expectations," he
said, adding that local fans' expectations are "raised sky-high,
then almost immediately shattered. They've become cynical…"
Asked
another local motorsport figure, one I have known for over 20 years
and who has travelled to Grands Prix at his own (considerable)
expense and can thus be classed as a true fan: "Why this obsession
[with a SAGP]? We [South Africa] are way too poor; witness the
devastation in [storm-hit Natal province], electrical load shedding
and blackouts, etc." His subsequent WhatsApp messages were more
explicit.
A consortium aims to bring a race to Kyalami
Still,
Warren Scheckter, nephew of Ferrari's 1979 World Champion Jody, is
hopeful of pulling all strands together to stage a race within the
next two years. He and former SAB Miller [brewery] heavyweight Keith
Doig founded the SA Grand Prix Corporation in 2015 and have thus been
over seven years in the trying. They were granted sole rights to a
SAGP - these have now elapsed - by F1 early in the process.
Warren
- son of sometime F1 driver Ian - confirmed that the rights have
expired, but the consortium remains hopeful of returning F1 to South
Africa. So, what is the latest situation, RacingNews365.com asked
Scheckter Jnr., in the wake of widespread speculation that a return to
Kyalami was imminent.
"We've
worked with Formula 1
for quite a number of years to try and make
a [Grand Prix] in South Africa happen,
and that's still an ongoing conversation," he
explained.
"We're working hard
with them to try and make sense of a business plan for South Africa.
We're making good progress,
but we still have some work to do. It's
looking good, but not done yet."
He
also suggested the hype is unhelpful for similar reasons outlined
above, and concedes that unless a deal is signed within the next two
years - 2024 at latest - SAGPC will need to reconsider its existence,
spelling the end of the dream.
"I don't think we'd want to go beyond 2024; we haven't given up hope on '23 but it's unlikely because of the congested calendar," he said.
"Logistically, it's a tight timeline for us.
If we were to look at 2024, it
will be the absolute latest if we were to do it, so,
yeah, we wouldn't go beyond that."
That's clear, then: 2024 or bust, despite eight years of effort and the support of Jody, who acts as chairman of the project. Against that background, if they can't pull it off, who can?
Why is Kyalami unlikely to host a race?
Why,
then, is it so difficult to cut a deal for a venue with such a long
and illustrious history, albeit forged mostly on the now-superseded
layout? The bottom line is the country's political imperatives
combined with a delicate economy hit particularly hard by COVID-19.
In
short, South Africa faces massive political and social challenges,
and while F1 may provide a brief PR fillip and boost tourism, the
fact is a SAGP won't build the schools, hospitals, and
infrastructures the nation desperately needs. F1 is perceived as an
elitist sport beyond the reach of indigenous Africans - forget not
that Hamilton was born in Britain to a West Indian father and English
mother - and is thus a hard ministerial sell.
Indeed,
Scheckter admits they are looking to the private sector to massage
the numbers into place: "We're looking at a combination of
everything from corporate partners to private investors to
some support from government in a very small way, but nothing
material [from state coffers]."
SAGP's
business model, if successful, would be to rent the Kyalami from its
owner, the Toby Venter family trust. Media reports (erroneously) have
it that Porsche is somehow involved in the circuit, but the truth is
that Venter is regional franchise holder for the brand (and
Lamborghini and Bentley) in the country, with the circuit a separate
if complementary project. Porsche AG have zero skin in the Kyalami
game.
Saliently,
Kyalami is now a major conference venue – having hosted but a
single race meeting in two years: January's international GT race.
The circuit holds a Grade 2 FIA licence which expires shortly and
would require upgrades to crash barriers, run-off areas, and medical
facilities to make the level required for F1. Garages require revised
access, while the current paddock is too narrow to accommodate
hospitality units.
The massive commercial risks of hosting a race
Indeed, the word is that F1 in October 2020 enquired about Kyalami's suitability for a COVID (spectator-free) race; talks came to nought: apart from Covid quarantines, extensive changes would be required and freight logistics were complex: the country sits at the end of one-way flight. Given the current capacity of 20,000 grandstand seats, double that would be needed to bring spectator numbers up to a maximum of 60,000.
Venter sees no need to upgrade Kyalami to F1 standards unless a Grand Prix eventuates, and such work does not come for free; thus SAGPC would need to guarantee the costs of elevating the circuit to Grade 1 levels plus maintaining the category licence for the contract duration. These costs would ultimately be reflected in the circuit rental, and thus ticket prices.
Let's do the maths: F1's average hosting fees pan out at $30m per race (before escalators), but a South African round would be in the higher reaches due to travel and freight costs, so around $35m. Add in circuit rental, Grade 1 costs and grandstands, and the figure spirals to $40 before promoter fees (marketing, security, ticketing etc) of another $5m – $45m all in at absolutely minimum.
The South African Rand currently trades at R15: $1, so R675m. Given Kyalami accommodates maximum 60,000 spectators and promoters have little or no other income, break-even is R12k per ticket, or more than many local teachers earn monthly. State subsidies would reduce the price but imagine the outcry – leaving SAGPC and private investors to run massive commercial risks to stage an event that whisks valuable foreign currency out of a cash-strapped country.
There are, though, two other alternatives for a race at Kyalami: the circuit, i.e. the Venter trust, promotes the event for its own account, or F1 enters into a joint-venture with SAGPC and/or Kyalami directly. Apparently, F1 has turned a J-V, although it has no qualms about such an arrangement in the USA. Possibly Kyalami is on the wrong continent…
Viewed by others:
What are the chances of a South African GP ever returning?
Venter
would, of course, be delighted to have Kyalami stage a Grand Prix,
provided someone else pays the fees – the rental is, after all, where
it's at for him.
"Absolutely," he confirmed when the question was put to him by RacingNews365.com during a track inspection last week, but he reiterated that Kyalami is not in a position to pay the hosting fee: "We don't own the rights; Kyalami will not be able to pay the hosting fee as such, but we will be able to organise the [Grand Prix] and we are able to provide the circuit.
"Alternatively, a joint venture which I still do
believe is not beyond our reach."
Thus,
two of the three pillars that are crucial to the running of such an
event - namely venue, promotion, and hosting fees - could be provided
by Kyalami, leaving the thorny question of hosting fees, which is
precisely where every project has come unstuck, whether at Kyalami,
in Cape Town or Durban.
Significantly,
Scheckter confirmed that SAGPC does not hold an exclusive deal with
Kyalami, merely that the circuit would be their preferred choice were
a deal to come together but does not discount a street race
elsewhere. Cape Town?
"From the government side a street circuit would be preferable," he said.
"It would essentially showcase a lot more [of the country]
and put something back into the economy; it'll create more jobs. But
Kyalami is already built up, so it's a more cost-effective option
which is a key factor because getting the right funding in place is
difficult."
So
that is the situation from various perspectives: Kyalami is ready and
willing to stage an event if all costs are covered; SAGPC is hopeful
of raising the requisite funding but admits that state support is
unlikely and F1 aims to tick a box marked 'Africa' but only if
said carton contains around $35m.
What, then, has changed since 1993? Absolutely nothing, so much so that a SPGP remains more likely than a SAGP – yes, South Pole could still beat South Africa to it. Alternately, Morocco could stage the next African Grand Prix – don't bet against it as an Africa box-ticking exercise.
Also interesting:
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