Kyalami is to drop off the World Superbike calendar once again, after the circuit's contract was bought out by the Gauteng provincial government.
The move follows a 're-prioritising of budgets and programmes' and is also a response 'to the adverse impact that the recession has had on government finances'.
The provincial government has thus agreed to pay R115m (£10.29m) to FGSport in order to bring the Kyalami
WSBK and Superstars contracts to an end after this season.
The Superstars contract had been due to expire in 2011 and the
WSBK contract in 2013.
“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 part of a media statement by Gauteng MEC for Economic Development, Firoz Cachalia, under the heading 'SBK and Superstars'.
“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.
“In terms of the settlement agreement, the provincial government will carry out its obligations to host the two events already set down in the 2010 calendar. We will ensure that these events are a success.”
Other motorsport contracts - including A1 GP, BMW Sauber and the pursuit of an F1 round - will also be cancelled, producing a claimed overall saving of R796m (£71.3m).
BusinessDay.co.za added that Cachalia did not think it was a good decision to enter into the contracts in the first place.
Nevertheless, Cachalia believes that the amicable nature of the settlements means the door is open for future motorsport opportunities.
"A multi-year program that the newly elected government considered was not in accordance with its priorities has been settled amicably without potentially resorting to costly litigation and in a way which preserves valued relationships," said the media statement.
"This leaves the way open for a future motorsport programme in South Africa and in particular for a private sector player."
Kyalami hosted five World Superbike events between 1998 and 2002, before returning to the calendar in 2009. The 2010 event will take place from May 14-16.
