Tuesday, March 28, 2006

Greg Ansley: It’ll take a huge budget to out-do Melbourne

As Melbourne takes a deep breath from the past 12 heady days, would-be hosts are looking at the more than A$1 billion ($1.14 billion) it cost the city to stage these Commonwealth Games and wondering: "Can we afford them?"

New Delhi has long made its mind up. The Indian capital will host the next Games in 2010, and has had a large team looking over Melbourne’s shoulder to see how it pulled its event together.

Potential bidders for subsequent Games have also been more than interested in the Melbourne experience.

Among them is Auckland, which is considering a bid for the 2018 Games, against potential rivals Lusaka in Zambia, Karachi in Pakistan and Sheffield in England. Auckland has hosted the Games twice before, in 1950 and 1990, but the cost and complexity almost three decades on will be vastly greater.

These will be major issues for the three cities so far vying for the 2014 Games: Halifax in Canada, Glasgow in Scotland and Abuja, Nigeria. The most ambitious is Halifax, a city about the size of Christchurch in the eastern maritime province of Novia Scotia. Glasgow has a population in its greater area roughly the same as Auckland, and Abuja, Nigeria’s purpose-built capital since 1991, has 2.5 million people.

That is fast changing. Nigerian Commonwealth Games Minister Nasir el-Ruferi, said when he announced the bid that by 2014 Abuja’s population would have soared to 13 million, with massive spending on sporting and other infrastructure.

But the costs for any city contemplating a Commonwealth Games are fearful. Each time a city hosts the event it lifts the bar for the succeeding host. And in Melbourne, where record crowds bought more than 1.5 million tickets, packed stadiums, thronged roadsides, cheered a A$50 million ($56.9 million) opening ceremony and partied through a non-stop festival, observers began asking if the bar was simply getting too high.

"That’s a question we keep asking ourselves all of the time," Games Federation president Mike Fennell said. "It is always a difficult thing looking into the future. "

The implications will be studied hard in Auckland, which has neither the scale nor the sophistication of Melbourne’s venue complex, nor its roads and public transport. The solutions will come, but not easily or cheaply.

According to the reported conclusions of estimates produced by Sir Ron Scott, the man behind Christchurch’s $8.5 million 1974 Games, the bill for Auckland if it held the 2014 event would run to about $1.5 billion. Another four years on, that bill would be even higher.

The Victorian Government put a A$697 million ($794.2 million) cap on its direct spending on the Games, which Commonwealth Games Minister Justin Madden said at the weekend he expected to be met. But this did not include the cost of a massive security blanket or venue and other infrastructure upgrading that seems likely to push the final total closer to A$1.5 billion ($1.7 billion) than the official estimate of A$1.1 billion.

The federal Government kicked in a further A$290 million ($330.4 million), much of it spent on jet fighters, warships, commandos and spies deployed to protect athletes and spectators from terrorists and other potential threats.

Melbourne knew what it was doing. The city could present to the Games Federation a city with a mix of venues and support systems, proven annually with the Australian tennis open, a Formula One grand prix and a string of other big, testing events.

Even so, the city had to spend hundreds of millions of dollars upgrading its facilities and services. Unlike Sydney, where taxpayers are still paying A$42 million ($47.8 million) a year for the Olympics, Games chairman Ron Walker said Melbourne had the cost covered.

"Most of [the upgrading and new facilities] are debt-free, " he said.

"Sure, we’ve raised the bar but that’s the way we do things here because we’ve had this vast experience over the years in running major events."

India, only the third developing Commonwealth country to hold the Games - after Jamaica in 1966 and Malaysia in 1988 - will be out to top Melbourne. It has previously twice staged the Asian Games and has ambitions to hold the Olympics, and sees the Commonwealth event as a key staging post.

Like other Games hosts, it sees large potential economic spin-offs and is prepared to put up the necessary hundreds of millions. The central Government will build two new stadiums and upgrade others. It has also guaranteed to underwrite any shortfall between the organising committee’s expenditure and revenue.

India will also fly athletes and officials to the Games free of charge, based on the average size of each country’s teams at Manchester and Melbourne, and will throw in free air tickets and luxury accommodation for two members of each national Games federation.

For bidders for 2014 and beyond, this means finding an increasingly larger pool of money.

Fennell said Melbourne had raised the bar considerably and that Delhi - and each succeeding host city - would try to lift it further.

"That’s not necessarily to say we want grandeur, but the quality of what we do and how we present it. It’s a struggle to do that without going to enormous levels of expense," he said.

"The fact is that each city wants to do better than the others because they see the tremendous benefits that accrue to the city."

But he said that it was still possible for even comparatively smaller cities such as Manchester to stage very successful events. Manchester has a population of 437,000 and tailored its facilities to compromise between the Games and long-term use.

Fennell said the Games Federation now had a formalised and sophisticated system to pass knowledge from one Games to the next, including comprehensive bidding seminars where potential hosts were told of minimum requirements, likely costs, and possible solutions. The next seminar will be held in Melbourne in July.

A key message of these is that all Games spending must be justified beyond the event. Bidding cities are encouraged not to spend any money on venues that do not have a sustainable use afterwards. Manchester held the capacity of its new 2002 pool to 15,000 to match expected future demand rather than a Games peak.

Melbourne believes it found the right balance, selling corporate sponsorship worth more than A$100 million ($113.9 million) and predicting net economic gain. Games Minister Madden said: "We invested substantial amounts of money in these Games, but we use the term ‘investment’ over and over again. All these facilities will be used week in, week out, after the Games."

Finding that balance will be the challenge for future host cities.

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