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Why do countries so love grandeur? Nations vying for the games always fugdge the cost during the application process when the final bill is always double or triple the estimate. London has recently fallen victim to Olympian math. Here is a brief analysis of the estimates vs. actual costs for past summer games:
Beijing 2008 Summer Games
Estimate: $4.4 billion / Actual Cost: $58.5 billion* = Cost overrun $54 billion
These figures are difficult to confirm as the Communist Party of China isn't known for its transparancy.
Athens 2004 Summer Games:
Estimate: 4.5 billion euros / Actual Cost: 9 billion euros = Cost overrun 4.5 billion euros
Sydney 2000 Summer Games:
Estimate: AUS$3 billion / Actual Cost: AUS$6.6 billion = Cost overrun AUS$3.6 billion
Montreal 1976 Summer Games:
Esimate: CDN$310 million / Actual Cost: CDN$1.5 billion = Cost overrun CDN$1.2 billion
On average, it costs 6x the initial estimate to actually host the Olympics and London's 2012 Olympiad seems destined to follow this trend.
In keeping with Olympic tradition, Britain's Culture Secretary Tessa Jowell, who also has special responsibility for the games, revised cost estimates (ahem) upward. The Olympic organising committee originally budgeted 2.4£ billion. The Labour government now projects a total pricetag of 9.3£ billion (approximately US$14 billion). Based on historical averages, the final pricetag should be somewhere between 9-14£ billion or approximately 200£ for every single British citizen. That's quite a lot of cheddar. Here is a chronology of the uptick:
2003: Consultants Arup put total cost of building and staging the Games at £1.796bn
2003: Tessa Jowell launches bid in May telling MPs it will cost £2.375bn - including a 50% contingency
2005: Bid succeeds in July with "prudent" estimate of preparing for games of £2.4bn
2006: Tessa Jowell says Olympic Park costs up to £3.3bn
2007: Olympic Park budget now at £5.3bn - including regeneration and infrastructure
2007: Total budget, including contingency, security and tax, reaches £9.35bn
Why do countries host the games? From a financial standpoint, they can bankrupt a nation like Greece for example. Is seems nations are more than willing to open the public purse for that Olympic moment. Right Athens?
For more information about Spyns and our tours to the 2012 London Summer Olympics, please visit our websites http://www.london2012-tours.com/ http://www.london-tours-2012.com or call us toll-free at 1.888.825.4720.
