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South Africa is bidding to host a F1 GP in Cape Town from 2013, which would be the country's first in nearly 20 years.
Plans are for a Monaco-style race through the streets of Cape Town that pass along the Atlantic Ocean coast and by the stadium used in last year's soccer World Cup.
However, a senior city official warned on Tuesday that high costs could endanger the proposal.
"The benefits of F1 look very compelling, however we need to look at the cost of hosting another big sports event and if it is in the developmental interests of the city," Mansoor Mohamed, executive director of economic, social development and tourism for the City of Cape Town, said.
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