Sticking to budget Olympic task for Paris

WITH Paris set to be awarded the 2024 Olympics, one of the organisers’ biggest challenges will be to keep within budget – a challenge that has defeated so many of their predecessors.

The French capital has set a relatively modest budget of €6.6 billion ($7.9 billion) but London in 2012, Athens in 2004 and Sydney in 2000 all saw their budgets for hosting the Summer Olympics at least double from the time of their bids to the final bill.

The budget-busting reached its peak with the 2008 Beijing Games, for which costs ballooned to €32 billion, more than 10 times the original budget.

Vladimir Andreff, a sports economist at Paris’ Sorbonne university, described Olympic budget inflation as “the curse of winning an auction”.

“In theory, the winner of an auction is the most optimistic participant and the one prepared to outbid everyone else,” said Andreff. “And when there are a lot of competing cities, the winner is trapped.”

In an attempt to impress the International Olympic Committee in the bidding process, candidate cities have a habit of underestimating certain costs and over-estimating potential economic benefits.

After evaluating the Paris bid in July, the IOC said in its report that while costs for security, preparing venues and installing temporary infrastructure “may be understated”, they “could be offset by potential expenditure reductions in other areas”.

Economists remain sceptical.