Following an unopposed race, the International Olympic Committee announced last month that Brisbane will host the Summer Olympic Games in 2032. Could the city be the first in decades to stay on budget?
Since 1960, every Summer and Winter Olympics has run over budget. An Oxford University study found that the Olympics is the world’s most expensive mega event, with host country’s sports-related costs averaging US$12 billion and non-sports-related costs usually several times greater.
In 1976, for example, Montreal came in 720% over budget and in 1992, Barcelona suffered a 266% cost overrun.
More recently, the 2016 Rio de Janeiro Olympics came in at 352% over budget. Comparatively, London didn’t do too badly – landing a mere 76% over budget at a total cost of $15 billion in 2012.
Japan was forced to navigate particularly challenging circumstances in the run-up to the Tokyo Olympics after COVID-19 resulted in a yearlong delay. It’s estimated that rescheduling Tokyo cost Japan somewhere in the region of $2.8 billion dollars, a sum that was funded by the taxpayer. When the country won its Olympic Games bid back in 2013, it was predicted that the Tokyo Olympics would cost a total of $7.3 billion. But most recently, financial newspapers Nikkei and Asahai have suggested that the final bill will be a staggering $28 billion.
Countless host countries have attempted to reap value from the Olympics by attempting to create a legacy of long-lasting infrastructure and increased tourism – but most have failed. Today, supporters of the Olympics have resorted to citing intangible benefits such as “community spirit” and “patriotism” in an attempt to justify the events’ extortionate costs. But there are plenty of people who despise organised sports and everything the Olympics stands for.
In Japan, many resent the fact that large sums of tax payers’ money is being spent on what they perceive to be an elitist and divisive event. A premature lifting of COVID restrictions, the fact that just over 20% of Japan’s population are currently vaccinated, and a ban on spectators at Olympic events has further angered the majority of people in Japan. In the lead-up to this year’s opening ceremony, the New Yorker referred to the event as “the anger games,” reporting that “The Olympics are supposed to be a symbol of global togetherness, but Tokyo’s are shaping up to be the least wanted in history.”
If the long-term benefits of hosting the Olympic Games are few and far between, perhaps the best Brisbane can do to limit the frustrations of Australian citizens in the coming years is to stay on budget.
Can proper procurement processes prevent cost overruns in Brisbane 2032?
When it comes to the Olympic Games, it would seem that cost overruns, budget underestimations, and angry citizens are inevitable. But perhaps Brisbane will succeed in evading the Olympic budgeting curse through the implementation of robust and effective procurement processes.
Ahead of 2032, Brisbane plans to spend $690 million on existing and new venues, as well as short-term infrastructure. There will be 31 current and short-term services, four new neighborhood centres, a centre of excellence for para-sport, and a new whitewater centre. In addition, Sports and Games operations – which takes care of athletes with, lodgings, food, medical support, etc. – could cost as much as $1.052 billion.
Despite these grand spending plans, Ted O’Brien – who served as Prime Minister Scott Morrison’s representative for the Queensland bid – is optimistic that the Olympics could benefit Australia’s economy. “Hosting the 2032 Olympics will not only inject billions into the economy, it will also create around 120,000 new jobs, including 90,000 jobs for Queenslanders,” he said.
Small and medium-sized enterprises in Queensland stand to gain enormously from the Olympics via procurement opportunities in construction, tourism, hospitality, retail, and transport sectors. But it’s crucial that the Australian government communicates its procurement policy as soon as possible so these businesses can prepare effectively and hopefully reap the legacy of the games.
Chamber of Commerce and Industry Queensland Senior Policy Advisor Gus Mandigora said, “We’d like to see the legacy encompass improved tender processes for small and medium-sized enterprises, specifically making it easier for small businesses to bid for projects.”
The Queensland government must plan ahead to implement efficient, innovative, sustainable, and transparent procurement processes. Writing for the Financial Review, Mark Ludlow argues that event organizers will need to lock in cost controls to deliver a cut-price $5 billion event and avoid expensive cost blowouts. Fortunately, the 11-year notice period gives the committee plenty of time to embark on the larger infrastructure projects and get proper procurement processes in place.