Kyalami Grand Prix circuit is likely to host its last World Superbike race for a while this season. Located in Gauteng, South Africa, the Gauteng provincial government has bought out the track’s remaining contract with WSBK in an effort to “re-prioritize” the local government’s budget of local programs. Kyalami was set to host WSBK through 2013, but instead it looks like this will be the South African’s track last season until the Gauteng government becomes financially stable again.
The Gauteng government has agreed to pay just over $15 million dollars (115 million South African Rand) to FGSport, the World SBK promoter, in order to buy the WSBK & Superstars contracts the venue had entered into. While the Superstars contract was set to expire in 2011, WSBK was paid up through 2013. The government’s move is an interesting one since it deals with a contract involving sovereignty and private organization.
“The legal advice we received is that these agreements were probably unenforceable under South African law but potentially enforceable in a foreign jurisdiction which would then expose the provincial government to costly litigation and reputational risk,” said Firoz Cachalia of the Gauteng MEC for Economic Development. “We have therefore settled these two contracts with FGSport which requires that the provincial government pays an amount of R115 million by the end of April 2010, an obligation which we will fulfil.”
Kyalami will still host both events this year, with World Superbike making its stop May 14-16th. The local government hopes the venue can return to racing calendars in the future, which is likely the larger reason for it buying out the contracts instead of leaving a sour taste in the FGsport’s mouth.