Benefits from Gold Coast 2018 to outweigh costs
by Euan Cunningham
A report into the 2018 Gold Coast Commonwealth Games has detailed heavier spending by local government than for the Glasgow Games 2014, but has also produced a long list of expected economic benefits. Author
11th April 2019, 10:05

The 2018 Gold Coast Commonwealth Games, held in Gold Coast, Australia last April, have so far cost a total of A$1.86 billion ($1.33 billion), when the cost of the games delivery is added to expenditure for infrastructure upgrades and investment that was planned with the games in mind, according to a post-games report commissioned and released by Gold Coast 2018 and the Queensland government. 

The ‘Gold Coast 2018 Commonwealth Games Post Games Report’ is an all-encompassing analysis of the effects, costs and potential benefits the 2018 games had on the state of Queensland, and on Gold Coast in particular.

A$1.286 billion was spent by the Gold Coast 2018 Commonwealth Games Corporation and other state services on running the games (a 24-per-cent increase on the equivalent of A$1.04 billion that was spent on the Glasgow 2014 Commonwealth Games), while A$577 million was spent by various government departments on building the infrastructure and facilities needed to successfully host the games.

However, the forecast overall boost to the Queensland economy as a direct result of the tournament is A$2.5 billion, thus exceeding the overall games cost. A$1.8 billion of that amount is forecast specifically to benefit the Gold Coast economy.

To provide context for this figure, a report into the financial benefits accrued from Glasgow 2014 found that 'Over the eight years from winning the bid to hosting the event, the Games has contributed more than $1.16 billion (£740 million) gross to the Scottish economy.'

A total of around 1.3 million visitors will be attracted to Queensland as a result of Gold Coast 2018 (from four years before the event to four years after), according to the report, which also predicts that these visitors will generate A$1.1 billion in income.


" The report details the successes of 11 days of spectacular sport and culture and provides strong initial evidence of economic and social host community impact and benefits "

David Grevemberg, chief executive of the Commonwealth Games Federation  

David Grevemberg, chief executive of the Commonwealth Games Federation, said: “We welcome the news that the economic boost attributed to the event exceeded the overall cost of the Games, with independent estimates of a A$2.5bn contribution to the Queensland economy, including a A$1.8bn boost for the host city of the Gold Coast."

Grevemberg described the report as: “An inspiring official record of the ambitious “Games of Firsts” - detailing the successes of 11 days of spectacular sport and culture and with strong initial evidence of economic and social host community impact and benefits.”

Costs The CGF, addressing the overall cost of A$1.86 billion that takes into account 2018 games delivery as well as the cost of investment and infrastructure linked to the games, said that not all of this money could be counted as games-specific, as several of the investments and upgrades made in and around the time of the games were already planned for, and would have happened anyway.

However, even after removing these related costs, the GC2018 (organising committee) games delivery figure of A$1.286 billion is still considerably more than the equivalent figure for the Glasgow games in 2014. The latter event cost £543 million at the time (A$1.04 billion, adjusted to 2018 inflation rates) in total. 

The CGF also noted that it is important to remove all capital infrastructure costs and non-core expenditure when assessing costs of games. When all the non-core costs have been removed, Glasgow 2014 cost the equivalent of A$910 million, while Gold Coast 2018 cost $1.192 billion.

Grevemberg, addressing changes the CGF has made to its games delivery model in order to reduce costs for host cities, said: “The strategic investments, and returns on those investments, are obviously fundamental considerations for any potential host city partner. The like-for-like Games delivery costs for Glasgow 2014 and Gold Coast 2018 were £505m and £662m respectively. Since then, recognising the gradual increase in costs over time, the Commonwealth Games Federation has transformed its Games Delivery approach for the 2022, 2026 and 2030 Games to reverse the trend of increasing costs from Games-to-Games and support the ongoing sustainability, impact and appeal of the event for host communities.”

The 2018 report breaks down the games delivery spend for GC2018 into specific sectors. 

The biggest expenditure, A$388 million, derives from the operating costs sector - normally associated with the logistical day-to-day running of an event, as well as paying both full-time staff and the many thousands of casual workers on which worldwide sporting events rely.

A$327 million was spent on facilities and venues – 18 venues (including the athletes village) in total were either built or redeveloped in total for the event, meaning a cost of A$18.16 million per facility. However, only four of these were entirely new, with another seven significantly upgraded. These 11 will therefore, it is assumed, have accounted for the bulk of that budget. In contrast, Glasgow 2014 spent £148 million on either completely redeveloping, or partially improving, nine venues (also including the athletes village.

Out of this £148 million, permanent redevelopments took £70 million, £55 million was spent on temporary venue changes 'such as staging, additional seat capacity and venue transformations', while much of the remaining money went on venue use agreements.

The Commonwealth Games Village for GC2018 also represented a considerable expense, receiving A$250 million from the central government Department of State Development, Manufacturing, Infrastructure and Planning. While the land on which it is built is still technically owned by the state, it is now held under a lease agreement by a company under the joint control of developer Grocon and global investment bank UBS. All 1,251 apartments and properties in the Athletes Village will eventually be converted into long-term rental properties.

A$327 million was spent on facilities and venues for the Gold Coast 2018 Commonwealth Games

Interestingly, A$174 million was spent by GC2018 on security, more than was allocated to five other categories; ceremonies, arts & culture & legacy benefits; games delivery; marketing & communications; media technology and broadcast; and transport. A total of 9,500 security personnel were used during the games, the most a Queensland event has ever needed. Security had also cost Glasgow 2014 more than expected: the original estimated security budget of £27 million has been widely reported as eventually more than trebling, to £90 million. 

Context While the 2018 games were costlier than their Glasgow equivalent, they were nowhere near as expensive as the Delhi 2010 games – an official report into the latter event found that it cost roughly 16 times more than the original estimate, and that the budget was “inefficient and deficient.” The overall cost for Delhi 2010 was reported to have been at least $4 billion, and a government audit in 2011 discovered that much of this cost was eventually picked up by the Indian taxpayer. The total revenue for the games came in at just $38 million. 

The auditors of Delhi 2010 accused the games’ organising committee of being “deeply flawed, riddled with favouritism and bias.”

A city that will have been looking closely at the costs incurred by the previous recent host regions is Birmingham, England, the location for the 2022 Commonwealth Games.

Although Birmingham has Europe’s largest local authority, with a £3-billion annual budget, fears have been raised that the city could potentially face serious financial challenges next year, largely as a result of hosting the event, if its finances do not improve. The council told the Guardian newspaper late last year that it had to spend £116 million out of its emergency reserves in the previous two years, just to keep operating.

The predicted cost of the 2022 games, although not officially confirmed is £750 million, of which the UK government is set to pay 75 per cent. However, that still leaves £180 million to be raised locally at a time when the city council has revealed an £84-million hole in its budget.

When asked about the approach Birmingham is taking to organising the games, Grevemberg pointed to the “experienced team supporting and accelerating the set-up of the Organising Committee and leading on the commercial programme”, and said the CGF was “confident that this revised approach to partnership and value generation will reap benefits”.

Birmingham was awarded the games in the first place after Durban in South African was stripped of the event over concerns about how it would finance the games.

Benefits The report breaks down the predicted A$2.5-billion boost to the Queensland economy as a direct result of the games. 

Local Gold Coast businesses are expected to have enjoyed a games-based boom
 

Local businesses are expected to have enjoyed a games-based boom, with 82 per cent of games-wide contracts awarded to Queensland-based firms, in contracts totalling A$1.7 billion.

These contracts have helped to ensure a projected figure of 21,000 new jobs on a yearly full-time equivalent basis over a nine-year period before, during and after the games.

Specifically, more than 16,000 workers were engaged in the construction of the games’ venues and Athletes Village.

The report also indicates that trade and investment in the area will boom in the period after the games. The games’ Trade 2018 programme is said to have "showcased the Gold Coast as a destination to invest and do business," and A$840 million worth of additional exports and foreign direct investment is expected over the four years immediately after the games. 

More than 2,500 representatives of foreign companies and investors attended the 32 Trade 2018 events held across the games locations.

In addition to the immediate financial and economic growth that Queensland is predicted to experience off the back of the games, various secondary benefits are predicted.

The Gold Coast Health and Knowledge Precinct, for example, is forecast to eventually support around 26,000 new jobs. As previously mentioned, the Athletes Village is already being transformed into 1,251 apartments and town houses, a transformation which is expected to add to the economic boost.

Public transport in Gold Coast has also been invested in, with a new Transport Coordination Centre that was built for the games having remained in place afterwards. 

Mark Bailey, transport minister for Queensland, said in April 2018: "The centre will remain long after the GC2018’s closing ceremony as a legacy building detailing improved, ongoing, real-time advice for commuters, residents and visitors,”

Legacy The report also assesses the potential legacy of the venues and stadia either built specifically or renovated for the event, as well as of the public services and communal infrastructure improved or redeveloped for the games. 

The Gold Coast 2018 Commonwealth Games opening ceremony

Bookings for the venues used during the games are this year expected to exceed 2018 numbers, according to official government figures, with many of the new and upgraded venues enabling Gold Coast to host events that could not have taken place there before. For example, international and domestic franchise cricket can now be regularly played at the Carrara Stadium, and the Belmont Shooting Centre, upgraded at a cost of A$19 million, is the only shooting centre in Australia which can cater for all shooting disciplines in one location.

Tourism to Queensland is also predicted to increase, after an estimated overall global audience of 1.5 billion viewed at least some part of the games. That figure is in addition to the 1.2 million spectators who attended the event (Glasgow 2014 claims to have attracted 1.3 million spectators, while Delhi 2010 attendances fell short of the anticipated numbers, with official reports placing the total attendance at those games at just over 1 million).

Gold Coast, already a popular Australian tourist destination, is predicted to attract another 250,000 visitor nights in the four years immediately after the games, while an extra 1.3 million tourists are expected to visit Queensland for the games, or as a direct consequence of them.

Kate Jones, the government minister in charge of overall Gold Coast Games delivery, said: “We delivered on our promise to ensure an enduring legacy for Queensland and the Gold Coast. We now have world-class facilities, a global reputation as a tourism and major events destination, improved transport infrastructure, and healthier and more active communities across Queensland that were inspired and benefited from gifted GC2018 sports equipment.”

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