"Our plans and preparations are on track, on time and within budget," Johannesburg Mayor Amos Masondo said in a sod-turning ceremony at FNB Stadium, one of 10 stadiums scheduled to be built or upgraded for the prestigious tournament.
Masondo said Johannesburg, the country's largest city and the hub of its fast-growing economy, intended to spend about 1.5 billion rand (190 million euros) to modernise and expand FNB, which has been dubbed Soccer City stadium by World Cup organisers.
The opening and final matches of the World Cup are scheduled to be played at the stadium, located near the giant black township of Soweto, south of Johannesburg.
FIFA move to clear way for England bid
Authorities have chosen a consortium led by South African construction firm Grinaker-LTA to build the stadium, which will have 94,000 seats and feature a calabash-shell to be lit up at night, creating the image of a stove pot.
The deadline for completion of the work is March 18, 2009.
In his presentation to foreign diplomats, city officials and journalists, Masondo said an additional 6.3 billion rand would be spent sprucing up Johannesburg's neighbourhoods and making its streets safe.
South Africa's high level of violent crime -- much of it centred in and around Johannesburg -- has sparked concerns that fans and athletes could be easy pickings for criminals during World Cup events in host cities.
The new U.S. ambassador to South Africa, Eric Bost, is among those who have warned that South Africa would have a difficult time attracting tourists for the games if current crime levels were left unchecked.
Masondo said the city was taking crime seriously and would have 4,000 police in place by the start of the tournament.
His optimistic forecast came amid reports that world soccer's governing body, FIFA, has been disappointed with South Africa's preparations and was considering moving the tournament to Australia or another country if progress was not made.
Top FIFA officials have repeatedly denied that any plan exists to shift the tournament away from South Africa.
Benelux launches World Cup bid
Sven lost sleep over World Cup