RIP Kyalami?

On the 24^th July 2014, the famous Kyalami Grand Prix Circuit in South Africa will come under the hammer at an auction run by Johannesburg’s High Street Auction Company. No reserve has been placed on the sale.

When I first heard this news, from F1 photographer Mark Sutton, it came as no real surprise, but I still found it incredibly depressing. Kyalami played a major role in my 40-year motorsport career and the thought of it possibly being dug up for housing or industrial development doesn’t do a lot for my soul. What makes it worse is that in my opinion, its potential demise, along with the decline in the popularity of motor racing in South Africa, could have been avoided. I’ll explain my feelings on that as we go along.

The first time I saw the Kyalami GP Circuit was in 1975, when I flew to South Africa to visit my parents. It was Grand Prix time and a friend of my Dad’s invited me to the race. It was unlike anything I’d ever seen at a Grand Prix in Britain. Spectators started arriving on the Monday preceding the Grand Prix and camped right around the track’s perimeter. A variety of scaffolding towers, many of them huge, were erected, whilst trucks and bakkies (pick-up vans) with seating installed in the open load areas, interspersed with caravans and motorhomes. By the Saturday morning, Kyalami, a crowd in excess of around 70,000 people totally surrounded the track, having driven in from all parts of South Africa. It was a vibrant atmosphere, fuelled by the smell of thousands of braiis (barbeques) and with alcohol available freely, there were more than a few parties going on!

After local hero Jody Scheckter, in a Tyrrell, delivered a home victory for the adoring fans, the partying was still in full swing as people were leaving on the Monday morning.

Little did I realise that within 5 years, I would be Manager of the Kyalami Grand Prix Circuit, with a FISA/FOCA battle and a drivers’ strike to contend with in my first two years. I outlined these two events in an earlier Money, Egos and Speed feature (Oct 2013 Edition).

What makes it worse is that in my opinion, its potential demise, along with the decline in the popularity of motor racing in South Africa, could have been avoided.

Interestingly, I was in Bahrain for the Grand Prix this year and met up with Niki Lauda. We chatted for a few minutes about the Kyalami Circuit and the incredible parties that took place at the Kyalami Ranch Hotel, adjacent to the track, where many of the drivers and some of the teams always stayed. He reckoned that Kyalami was his favourite venue for winter testing. Not only was it a great circuit in its own right, but with the Southern Hemisphere weather and the opportunity to visit a game camp or two, he always looked forward to heading to South Africa.

Situated at some 1800 meters above sea level, the circuit posed a serious power-loss challenge for normally aspirated engines, whilst the turbo-charged units could compensate by the boost being turned up.

It wasn’t just the altitude that affected the F1 teams when they arrived. The African sun took its toll and many a mechanic, especially those who had flown in from an English winter, ended up looking as though they were wearing a Ferrari shirt, so burnt had they become.

Sadly, in 1985 a combination of factors, political, economic and local resident related, prevented the extremely popular South African Grand Prix taking place for the next eight years. It was the end of a glorious era for the famous race track, which had witnessed so many incredible F1 races.

On December 5^th 1987, the final race took place on the circuit, an international Group C sports car event. Once the chequered flag had fallen for the final time, the famous circuit was closed and industrial developers moved in. I always count myself privileged to have taken part in the final race.

All was not totally lost, however, and eventually a new Kyalami sprung from the ashes of the old. Sections of the old circuit remained in the design, but the new track layout never regained the stature and respect that the Kyalami of 1967-1987 had earned. In the words of one former Grand Prix reporter, it had just become “yet another mundane modern race track!”

In a country that has a reputation for “imaginative” business dealings, that wasn’t the end of the story for Kyalami. The new version of the circuit was at the centre of a huge Supreme Court case in the early ‘nineties. It became known as the Tollgate Holdings affair and some of the directors of the company MRE that now owned the track were also involved as directors of Tollgate Holdings, a major South African Holdings Corporation. The High Court judge was damning in his comments on the senior management of that company. The result was that the Motor Racing Enterprises (MRE) went into liquidation. The circuit then came under the control of country’s governing body of motorsport, MSA.

In 1992, two years after Nelson Mandela had walked out of the gates of Pollsmoor Prison and two years before his Presidential inauguration, the South African Grand Prix reappeared on the World Championship Calendar. In 1993, as Marketing Director of the Lola F1 Grand Prix Team, I returned to Kyalami and watched Alain Prost in a Williams take victory in a Grand Prix which had only seven drivers classified as finishing the race. It proved to be the last ever South African F1 Grand Prix.

Gradually, as sports like soccer, cricket and rugby came to the fore in South Africa; motorsport started a decline that was both alarming, but avoidable. Instead of trying to halt the slide and develop motorsport programmes that would appeal to the rapidly emerging black middle class within the “rainbow nation”, all that those involved could think of was getting an F1 Grand Prix to South Africa. As fervour grew in this respect, logic went out of the window. Several high profile individuals, many with a litany of drama in their wake, headed up different campaigns designed to bring back the SA Grand Prix. Some wanted a street race in Cape Town, others a new circuit built in Johannesburg and then there were stories of a new super Grand Prix circuit being built in Durban. The problem was that no-one had actually worked out that a Grand Prix doesn’t make money and certainly doesn’t create the number of sustainable new jobs being predicted as being in their thousands.

Meanwhile, national motorsport in South Africa continued its decline, with BMW, Toyota and Nissan pulling out of track racing to concentrate either on other marketing activities, or on off-road motorsport.

Then in 2009, the Province of Gauteng, formerly known as Transvaal, hit the headlines by announcing its sponsorship of the BMW Sauber F1 Team. It appeared under the branding of GO-GP.ORG. This was supposedly meant to be an attempt to promote Gauteng Province (GP) as “a great place to do business”, but ended up with most people thinking it was yet another campaign to promote a South African F1 Grand Prix (GP)!

This in turn lead to a string of what could best be kindly described as average international motorsport events being staged at Kyalami, at an extraordinarily high cost, somewhere in the region of R600 million (at that time the exchange rate was close to 10:1). These events had been organised through a sports management company set up by the Province, attracting many of the usual names that one associated with motorsport based financial adventures.

The entire debacle attracted an interesting response from the Opposition Party, the Democratic Alliance. This is an extract of the alleged claims:

“Leaked documents to the Democratic Alliance show that more than R600 million is to be paid for motorsports promotion in Gauteng that will do little to boost the economy or create jobs.

We will be paying R150 million over three years for the A1 Grand Prix, R444 million over seven years for the Super Bikes World Championship, and R39 million for three years of the Super Stars series.

A report by Bowman Gilfillan prepared in October last year for Blue IQ, an agency of the Gauteng Department of Economic Development (DED), is extremely critical of glaring irregularities in the Motorsports projects and the high-risk contracts entered into.

Identified deficiencies include:

Gauteng Motorsport Company (GMSC) was corporatised without Treasury approval

Supply chain compliance is unknown

It is unknown what amounts have already been paid out

The assets and licences attached to the project are unknown

The contracts are either silent on Governing Law or a foreign Governing Law applies

No breach clauses

Government obligations beyond the scope envisaged by the PFMA

No financial cap on the amounts to be spent for hosting the events

No exchange control clearance from the SA Reserve Bank”

As you can see, this wasn’t the most confidence inspiring endorsement of the motorsport activities taking place at Kyalami. Since then, matters have gone from bad to worse, with poor attendance at race meetings and constant uncertainty about the fate of the circuit.

It might be easy to blame all of Kyalami’s woes on a poor economy, or the fact that 25% of all South Africans are unemployed, but that would be to ignore the success story of the privately owned Zwartkops Race Circuit, some 10 miles away from Kyalami. The owner, Peter Du Toit has done an amazing job in building this derelict old track into a superb national standard race circuit. Its focus is on promoting historic, club level and national races at affordable prices. He has given the large number of spectators who attend the race meetings races at Zwartkops exactly what they want, with no grandiose ideas for an F1 Grand Prix to draw all of South Africa’s sponsorship spend into one annual 3-day bender!

Once again, the future of Kyalami as South Africa’s major race venue is in the balance. With an estimated price tag of around R150 million, the circuit may be purchased by a rich enthusiast from somewhere around the world. Then again, it’s an attractive venue for the development of the proposed Mall of Africa project, which would be the country’s largest-ever shopping mall. Sadly, there’s no room for sentiment at an auction!

I only hope that if the circuit does survive as a motorsport venue, some realistic business planning takes place and that the usual suspects, who see it as a chance to make a financial killing, don’t get involved again. If it doesn’t survive; RIP Kyalami.