FIFA Taking Out Insurance Against World Cup Cancellation

October 27 - In South Africa it is still business as usual, according to FIFA, and all the plans for the 2010 World Cup are on track and rolling ahead. However, despite this voice of confidence, FIFA is not taking any risks and has decided to take out an insurance coverage of  $650 million against the 2010 and 2014 World Cups being postponed or relocated due to the global credit crunch.

The decision to take out this insurance coverage followed two days of intense meetings of FIFA's executive management. A detailed analysis of the situation was discussed and a report of the potential impact of the global financial crisis was presented. According to the analysis, FIFA was well-equipped to weather any major financial crises and the policy would also provide cover against terrorism, natural disasters, epidemics, war, accidents or turmoil.

FIFA insisted that the taking out of the policy was standard practice and in no way indicated a lack of confidence in event taking place. In a statement issued, FIFA general manager Jerome Valcke said: "There has always been an insurance policy for World Cups and has to do with a natural or non-natural catastrophe or any event that could lead to the postponement of the event to another country from South African...but we are on time to deliver the Confederations Cup and 2010 World Cup in South Africa."

Trevor Manuel, South African finance minister, announced recently that he would allocate an additional R8.8 billion to the municipalities to help with the costs of preparing for the World Cup. An additional R5.4 billion would contribute to alleviating the effects of inflation on operational and capital spending. programmmes.