Games expenditure to exceed $6 billion !
3 June 1998Hosting the 2000 Olympic Games will cost taxpayers a further $617 million, according to the first complete estimates released yesterday by the Treasurer, Mr Egan, as part of the NSW Budget.
Nearly five years after Sydney won the bid to host the Games, estimates have been provided for the missing link in Olympic finances - the costs which all government agencies such as police, waterways, transport and health authorities expect to incur.
These costs constitute the third separate Olympic budget and make it possible to give an overall financial picture of the cost of hosting the Games.
The first budget, SOCOG's budget announced last year, says the organising committee expected to spend $2.301 billion and deliver a $30 million surplus to the Government.
The second budget, updated yesterday, shows the Government's overall construction program for venues and other infrastructure will cost $2.185 billion, with the private sector spending a further $1.084 billion in joint ventures. These projects will cost a total of $3.27 billion.
Yesterday's announcement of $617 million for other government costs is the final component and tips the total over$6 billion.
But these costs do not include $175 million in revenue from the Federal Government, $295.6 million from SOCOG or $74.2 million from OCA property asset sales, which reduce the net cost to the Government.
The Minister for the Olympics, Mr Knight, said the costs disclosed yesterday would also be largely offset by $602 million in extra tax revenue the Treasury has estimated will be received by the State between 1994 and 2001 as a direct result of staging the Games.
Once all these figures were included, the Government calculated that the net cost to it of staging the Olympics was $1.65 billion - all of which will be paid out of existing revenue so that there will be no outstanding debts after the Games.
In calculating the cost of the Games, the Government said it had only included costs "directly related to the Olympics and which must be incurred as a result of Sydney bidding and being chosen to host the Games". The Auditor-General is now reviewing the Government estimates and is certain to disagree with the Government's decision to omit some works from its calculations, such as the $20 million overpass on Centennial Drive near the Homebush Bay site, which the Government says was built because it was a traffic black spot and not an Olympic project. Mr Knight said the $617 million extra cost to the Government was made up of two parts - $407.7 million to be spent by non-Olympic government agencies such as police and transport authorities, and $209.3 million to be spent on recurrent services by Olympic-specific government agencies, the OCA and the Olympic Roads and Transport Authority.
Most of the money would be needed for training and employing people to transport, protect and bring services to the biggest crowds seen in Australia.
In addition to the major Olympic capital works, the Government announced yesterday a further $90 million for smaller capital projects, including security fencing, station upgrades and wharf improvements.
Speaking from Seville, Spain, where he is leading SOCOG's presentation to the International Olympic Committee this week, Mr Knight said the full scope of the Government costs in staging the Olympics - including costs of transport and policing the site at Homebush - could not have been assessed until after this year's Royal Easter Show.
"You have to be sensitive to the fact that if you want to run the Sydney rail system at its peak over a 20-hour period rather than four hours a day, you need a lot of drivers and guards and you can't hire them off the street," he said.
When the State Government prepared its bid to host the Olympic Games in 1992, it estimated that $402 million - or $550 million in today's dollars - would be needed to build all the Olympic facilities.
Yesterday's Budget puts the net cost to the Government of building facilities at $1,640 million, three times the original amount.
In hindsight many of the early estimates were too low, but the real problem is that so much was left out. Yesterday's Budget includes all the bits that were left out in the original estimates - the roads and sewerage and a million other details which cost so much. It would be unfair to portray the figures simply as a blow-out due to poor management. Rather it is the first full list of what is needed to stage the Games, and according to the Auditor-General, it is long overdue.
Transport is the biggest extra cost. The Government has spent $100 million building a new rail line and station, now it estimates it needs a further $186.1 million to maximise public transport use.
Much of that money will be spent training crews, and employing up to 400 extra train drivers. Stations that are normally unattended will be staffed during the Olympics, adding a further cost.
The Government estimates that 3,350 buses will be hired, and about 4,500 bus drivers will be needed. Many will come from out of town and need training to familiarise them with Sydney streets. They will also need somewhere to stay, something to eat, and two-way radios.
In the city, $20 million has been set aside for "temporary facilities". These include portable toilets for the Domain, The Rocks and Circular Quay and Hyde Park. There's also money to repair any damage to the Royal Botanic Gardens.
Police have estimated they need $134 million extra. That includes $34.7 million in capital costs, money to buy 150 pieces of equipment including magnetometers, x-ray machines, sniffer dogs and even high-speed boats for security during the sailing events.
Hospitals and health official will need $8.8 million to prepare wards, employ translators and food inspectors to reduce the risk of food poisoning.
At present, only Circular Quay and Darling Harbour have berths suitable for the 10 cruise ships expected during the Games. Some of the $4.7 million allocated to waterways will be needed to provide sewerage, shelter and other services at wharves normally used for cargo shipping.
Money for all these services will be set aside in a special fund and agencies will apply for cash as they need it.
