University research says the London Games are on track to be among the most expensive to date with a projected cost of £8.4 billion in real terms – and at 101pc over budget. The Oxford research, which compares cost data from summer and winter Olympic Games of the past 50 years, shows the eventual cost of the Olympic Games is always over budget, by 179pc on average. However, while the overrun of the budget for the London Olympics is broadly in line with earlier Games, it is ‘significantly more’ than the average budget overruns for Games during the past decade, say the researchers.
The working paper by researchers at Oxford’s Saïd Business School compared estimates of the costs to be incurred by the organising committee in the initial Games budget to the final cost of the Games. Costs factored into the calculations included security, transport, technology and ceremonies, and related construction costs for sports venues, athletes’ villages, and press and media centres.
Comparing total costs for all Games of the past 50 years, the London Olympics are projected to rank alongside Beijing, Barcelona and Montreal as the most expensive Games in history. The total London 2012 sports-related budget has increased by 101pc from £4.2 billion in the 2005 bid to £8.4 billion in real terms, says the research.
The paper points out that while staging the Olympic Games is one of riskiest major projects in terms of cost overruns, host cities seem to have improved their predictions over the last decade. It shows that since Sydney in 2000, the Games have come closer to achieving their bid budgets, with an average overrun of 47pc for 2000-2010, as compared to an average overrun of 258pc before that (1968-2000). This could be because the more rece
