Think twice before you jump into the Olympics bidding game

Is India going to throw its hat into the Olympic Games bidding ring? There is heightened speculation as President of the International Olympic Committee (IOC) Thomas Bach arrives in New Delhi on April 26 and meets the Prime Minister, Narendra Modi, the next day.

India had never officially bid to host the Games though there had been proposals to go for a bid in the past, the last one being a less-publicized vote by the Indian Olympic Association (IOA) in December, 2009 to bid for the 2020 Olympics.

With the Modi Government projecting a “new image” of India abroad, alongside concerted attempts to attract foreign investment, and with everyone talking about a great push for the corporates at home, there could be a serious possibility of India joining the bidding fray in the coming months.

Needless to say, the big construction companies at home and abroad will stand to gain, not forgetting those that would provide technical know-how and expertise in planning and executing a games of this magnitude where more than 12,000 athletes could be expected by 2024.

There could be many other gains on the sports front and an array of economic benefits, both direct and indirect. But would this be worth it? That should be the lingering doubt as the Government examines the possibility of a bid, if that were to happen, in the coming weeks.

The ‘applicant city phase’ for the 2024 Games will start on September 15, 2015. That means, in just over four months time the Government of India will have to at least complete the preliminary assessment of the city intending to bid, the broad costs for bidding, a rough estimate of the costs should India win the bid, the mechanism of the bidding process and an assortment of other details.

Olympic Agenda 2020

As per the new Olympic Agenda 2020, the IOC would be helping out candidate cities in the bid process. It has started registration process for consultants who will help the cities formulate their bids. This is being done to ensure that cities are not fleeced by consultants and campaigners and the highest ethical standards are followed in the bid process.

If India decides to bid following the visit by Bach, it will be doing so at a time when a few other contenders, notably Boston (USA), Rome (Italy) and Hamburg (Germany) have declared their intention to bid while Paris also looks to be seriously contemplating its second bid since 2005. Paris lost to London by four votes in its bid for the 2012 Games.

Other cities being mentioned in recent reports include Budapest (Hungary), Baku (Azerbaijan) and Doha (Qatar). The list may grow or shrink in the coming weeks.

In 2009, the then Union Sports Minister, M. S. Gill, had dampened the spirits of the sports administrators by saying India should not be thinking of holding the Olympics.

“I am not sure if India should be thinking of the Olympics. Look at the poverty here”, Gill told the Rajya Sabha during a discussion on the preparations for the 2010 Commonwealth Games. “China spent $50 billion for the Beijing Olympics. Are you ready to spend that much?” Gill said. (China actually did not spend that much, with official figures showing only $ 5.5 billion though unofficial figures put it over $25 billion. But Russia reportedly spent more than $ 50 billion for the Sochi Winter Olympic Games in 2014, the most expensive Olympics ever).

A previous attempt by the IOA to contemplate a bid for the 2016 Olympics was effectively scotched by the then Sports Minister, Mani Shankar Aiyar.

Changed scenario

Today things might have changed in Government thinking despite the scams involving the hosting of the Commonwealth Games in New Delhi in 2010. Still the Government would do well to analyze all the implications of even going for a bid before actually committing itself.

There are a number of theories that interested parties encourage you to believe about why a country should go for an Olympic bid. From economic benefits and boost to tourism to the possibility of gaining greater respect among the comity of nations are just a few of the plus points often mentioned. Also there would be the undisputed benefits in sports development including sports infrastructure.

Brazil is going to do it next year so as to show its emergence as an economic power apart from attempting to increase the country’s prosperity. The infrastructure development in Brazil alone may cost more than $20 billion, reports have said. The London Games cost came to around $15 billion, officially the costliest Summer Games till then.

Will it be prudent for a country like India to spend billions of dollars? Say $ 40 billion?

Cost v benefits

The cost v benefits analysis should guide the politicians and bureaucrats when it comes to taking a final decision on India bidding for the 2024 Games. Whether the city is New Delhi or Ahmedabad (which some reports have indicated could be the venue)  the bidding costs alone would be in millions of dollars notwithstanding the more streamlined, less expensive procedures being adopted by the IOC under Olympic Agenda 2020.

If it is New Delhi, some infrastructure could be shown as available during the bid process. By January 2017, if not earlier, cities will be expected to show proposed infrastructure if not the partially-completed ones.

More than 90 per cent of the eventual costs go towards infrastructure, including rail tracks, roads, flyovers and airports, and since the IOC is constantly trying to keep the costs down, it would be better to have a city with some sports infrastructure good enough to host Olympic events than start from scratch. 

In February-March, 2017 the IOC Evaluation Commission will visit candidate cities.  In June that year the IOC will publish the Evaluation Commission report. Anytime after that the IOC Session would be convened to decide the host city for the 2024 Games.

What have experts said of the so-called economic benefits of hosting the Games? Much of it had been dismissed as myths by many economists and planners. A study made by a team from the Oxford University in 2012 before the London Games showed average cost overrun of the Games (Winter and Summer) from 1960 to 2012 to be 179 per cent. The Summer Games (excluding London) showed an average overrun of 252 per cent.

The planners, economists, advisers and sports administrators have to take this factor into consideration while advising the Government to go for the bid.

Much of Greece’s debt crisis, reports have said, could be traced back to the Athens Olympics in 2004. The majority of its sports infrastructure used in 2004 has remained in disuse, reports say.  And Greece is still struggling, it would seem, to maintain the venues.

Montreal took three decades to clear debts

Montreal took three decades to clear its debts amounting to 2.8 billion dollars after hosting the 1976 Olympics.  

Montreal’s eventual bill of $ 6 billion worked out to 796 per cent cost overrun (Oxford University study), a dubious distinction by which the Canadian city still heads the escalation charts of the Olympic budgeting.

Today, the figure of $4.5 billion proposed by Boston for the 2024 Games to the US Olympic Committee is being questioned by experts.  Economist Andrew Zimbalist whose piece for the IMF in 2010 on the plus and minus points of hosting the Olympics is mentioned above and who has written the book on Olympic costs, ‘Circus Maximus: The Economic Gamble behind Hosting the Olympics and World Cup’ was quoted as saying that Boston could end up spending $10 billion to $15 billion.

“When the promoters of the Olympic Games try to convince the public officials to support the Olympic effort, they come in with a bare bones plan with very few frills, and then over time once the commitment is made all of the elaborations, all of the frills come on top of that” Zimbalist was quoted in a recent report.

There will be a rush of tourists during the Games and after that, we are invariably told when a city is about to bid for a multi-discipline games.

The tourist rush that never was

In reality, it never works out like that. Around 1,32,000 tourists were expected for the Sydney Olympics in 2000. Only around 97,000 turned up. Post-Games, estimates put the figure of tourists in Sydney at 10 to 12 million a year. Sydney has managed with about 2.5 million international tourists a year. Last year it went up to around three million, according to figures released by the New South Wales Tourism department.

During the Olympics, the otherwise normal tourist inflow goes down since no one would venture to come at that time thinking that there would be a shortage of accommodation.

The National Olympic Committee (NOC) invariably projects huge revenues gained from the IOC  (which takes the television rights to be distributed among organizing committee,  the international federations and itself) towards operational costs and athletes' funding etc. But eventually the costs of infrastructure and running of the Games reach astronomical proportions as had been the experience of many a host. The IOC has world-wide sponsors helping it fund National Olympic Committees (NOCs), but advertising is taboo during the Olympics.

London eventually felt satisfied with the success it achieved in organizing the last edition of the Games. Beijing in 2008 and Sydney in 2000 also had that feeling of “achievement” in putting up a grand show.

Will it be worth it for a country like India, provided it gets the Games?

Big maintenance nightmare

Maintenance of the infrastructure built for the mega events is a nightmare. We have seen that after New Delhi hosted the 1982 Asian Games and the 2010 Commonwealth Games. Meagre allocation of funds has left several Delhi venues in poor shape. Many plans had been worked out but there is no sign yet of a successful, cost-effective one.

Will not hosting the Olympics ensure a host country of a better placing in the medals standings?

Not necessarily. Canada had the dubious distinction of not winning a gold in 1976, the only host country to do so, when it hosted the Games in Montreal.  Both Canada and Mexico (host in 1968) have not done too well in the games since hosting them.

The home advantage would surely give an edge to India if t were to host the Games as Commonwealth Games 2010 showed. But then there is no guarantee that the medal-winning streak would be sustained. It did not happen in the Glasgow edition of CWG last year. CWG 2010 though well-conducted were eventually trashed as scam-ridden by the critics.

For a country that spends less than Rs 2000 crores annually on sports and which does not have basic facilities at many centres for Olympic sports (for example synthetic turf for hockey or track for athletics at centres where they matter the most), where athletes struggle to get international exposure for want of funding, which just has one Olympic gold in an individual event (Abhinav Bindra in shooting in 2008), which finished 55^th on the medals table in the last edition in London and which has perennial problems with its sports administration, the money that may be spent for bidding, running into millions of dollars, could well be diverted for useful purposes.

What are the chances?

With Tokyo set to host the 2020 Games, it is doubtful the IOC members would go in for another Asian city for the next edition. It is also extremely doubtful if India would get the games on its first attempt when cities and countries have tried to get them repeatedly and failed.

US President Barack Obama had campaigned personally for Chicago last time, but it lost out early in the voting from among the short-listed cities with Tokyo, Madrid and Rio fighting it out from the second round onwards.

If you start thinking that Bach’s visit might just set the stage, then think again. Bach said less than 10 days ago that Paris would be “exemplary hosts” in 2024. 

The IOC chief is obviously keen to get more countries involved after a spate of withdrawals from bidding cities for the 2022 Winter Olympics.(Finally, Almaty, Beijing and Oslo have been left in the fray).

A decision to go for an Olympic bid requires a deep understanding of the issues involved, an understanding of the priorities in sports, those of the people of a country, and about the legacy that the games may leave. Rushing into it will be of no use since money will need to be sunk to show a large part of sports infrastructure by 2017 in time for the evaluation process. If the Government uses this as an opportunity to make a more serious bid for 2028 not many may crib. By then, hopefully, India would have created adequate infrastructure facilities for its sports community spread across the country and would have hauled itself up to the top-20 standings on the Olympics medals table.

Post-script

On the evening of Monday, April 27, 2015, Thomas Bach told the media that India would not be bidding for the 2024 Olympic Games.
"We were happy to see that the PM (Modi) was sharing this feeling — that he is seriously looking at the Olympic candidature." Bach said. "However, he wants to be well prepared and have all the expertise. It was an opinion shared by us," an AP report quoted the IOC President as saying.
(updated 11.15 p.m, April 27, 2015)