Thursday, September 14, 2006

Auditor sounds alarm about Olympic costs, stumbles

VICTORIA - It's time to get worried about the 2010 Olympics.
Not just about what the Games are going to cost you, although that's a big concern in the light of three sharply critical reports released this week.
But also about whether the government is fumbling the chance to ensure that B.C. gets some lasting benefits from the two-week event.
Acting auditor general Arn van Iersel released the office's second review of the province's Olympic activities this week. It was alarming reading.
A lot of the talk was around what the Olympics are really costing British Columbians. Premier Gordon Campbell insists the tab is just $600 million - the direct cost of narrowly defined Games spending.
But the auditor general, like almost everyone else, has again dismissed that claim. he Sea-to-Sky Highway improvements were part of the bid and should be included, he found. And it's foolish to claim that the government's Olympic Secretariat isn't part of the Games cost.
All in, the auditor general says, and provincial taxpayers are on the hook for at least $1.5 billion.
Municipalities are putting up another $400 million and the federal government $607 million.
The total tab from taxpayers will be at least $2.5 billion.
The government can stick to its story; the public will decide whether they believe the politicians or the auditor general.
But by not including all the costs, van Iersel says, the government is making it difficult to properly manage the programs. The budget for the Olympic Secretariat, for example, has increased from $24 million to $41million.
"For the province to manage its costs for the Games, the costs must first be defined and measured," he says. "The province, however, has not yet developed a comprehensive definition of Olympic costs."
The report raises bigger questions about what lies ahead.
The province has only $76 million left in its contingency fund for Games overruns, having already handed the Vancouver Olympic Organizing Committee $55 million to cover rising venue costs.
That's not likely going to be enough, says van Iersel.
For starters, there could be more cost overruns on Games construction. (A federal report released at the same time offers the same warning.)
And three years after B.C. was awarded the Games, organizers still don't have a handle on the costs of security or medical care. Ottawa and the province have agreed to split security costs, but they are still using the bid book estimate of $175 million in 2002 dollars. Inflation, increased security threats and other issues could easily double or triple that cost.
The problems aren't just on the cost side. If the Games are going to be more than an expensive party, the auditor general warned in 2003, the province needed a well-funded, well-planned marketing plan to seize the benefits. A government report in 2002 urged an immediate start on marketing efforts to ensure potential indirect economic benefits of $4 billion.
It hasn't happened. "The marketing effort to date has been delayed and unco-ordinated, with no central agency taking the lead," the new report found.
And the province apparently didn't realize that the International Olympic Committee restricts international marketing until the previous Games have concluded. B.C.'s hands are largely tied until after the Beijing Games, leaving just 18 months to woo the world.
That should be a special concern for communities outside the Vancouver-Whistler corridor. People who live in the rest of the B.C. are paying for the Games, but are at risk of seeing few benefits.
Finally, the report raises concerns about the secrecy around Games spending and plans.
"We are also concerned that the province has not done more to make the Games budget a public document," the auditor general's office says. The province has agreed to cover all cost overruns, he report notes, and the public is entitled to better information.
The alarm bells are sounding. It's far from clear that Campbell and company are listening.
Footnote: The province's marketing plan is also being hobbled by VANOC, the auditor general reports. Even though the province is by far the largest contributor, the Games organizers want to keep the best marketing tools for corporate donors. It won't even let the government use the Olympic rings or the word Olympic in ads.


Anonymous said...

Seems Gordon is still sticking to his story about 600 millions. His committee shut down debate on the Interim auditor and got the fellow they wanted. So he now tells them the numbers are off by about 1 and a half Billion and counting. Nobody got fixed costs on media and the list goes on.and of course even though the opposition has from day one said there is no accountability, now backed by the Interim Auditor General it must somehow be their fault. The talk about fast ferries is about to surface any time soon.

Anonymous said...

"'s foolish to claim that the government's Olympic Secretariat isn't part of the Games cost." Paul, you cynic... Why should the BC LIberals count the cost of the Olympic Secretariat into the price of staging the games?

"...the Games organizers want to keep the best marketing tools for corporate donors. It won't even let the government use the Olympic rings or the word Olympic in ads." Shouldn't we all have license plates with the Olympic rings on them? For $2.5B I think so!

Anonymous said...

Voice of BC was interesting this evening.Baldrey was sort of darting around the issues now and again. Not so for Palmer. Gordon still sticks with the 600 million and as they mentioned, nobody better stray from that number if they want to be on the team.You hand pick a fellow for Interim Auditor General and then claim he has it all wrong. I think the tax payers of the province may think otherwise, but time will tell.

Gazetteer said...

That's some Postscript, that Postscript-22.....


Anonymous said...

"It's time to get worried about the 2010 Olympics."

I started worrying the day we signed on to this farce.

Just heard Colin Hansen on CKNW... Bill lets him spin away, challenging none of his assertions. So predictable.

I thought we were required to have the Sea to Sky upgrade to win this bid... now they say we were going to do it anyways. Does anyone really believe the Sea to Sky highway would've been upgraded without the Olympics?

Then there's the RAV (sorry Canada) line, built at the expense of the long promised transit line in the north-east corridor. What a joke... this will make the fast cats look like peanuts.

If it was the NDP running the show how an opposition Liberal party would howl... the media would be calling for heads to roll.

Don't blame me, I voted against this nonsense.

Anonymous said...

Yes Bill doesn't believe in rocking the boat its a safe place for the Lieberals to dissemble the truth as they see it.Anywhere outside of the lower mainland doesn't matter anyway and after the seat adjustments we'll just be loose ends.

Anonymous said...

From Palmer's Voice of BC... the government gets an advance look at the report so they can respond.

Would that be why the house is not sitting this fall?

Anonymous said...

Gosh 9:57 what a cynical bunch we are. Gordo and venoc say all is well, we are on budget as th Auditor general( His tour will be short no doubt) mentions how the cops can't budget as they havn't seen the building plans , along with a bunch of other clangers. Just think, the next thing Gordo will be telling us that it's the NDP's fault. Rave on Mr. Premier. I like the T/C,s editorial this morning. Come clean and before the next election. Time to haul out Bingo gate , anyhting to deflect the taxpayers.This event will break us so let's get the real numbers now. Do I expect that to happen? Not unless the great unwashed start to holler a lot louder.

Anonymous said...

Wasn't it Dick Pound that said the VENOC Boss was in over his head? Wasn't it another IOC guy who told us the security numbers were way off base. Wasn't it the federal auditors who looked at the figures and the federal governemtn who came up with another 57 millions and said, don't come back for more. They will be back for more. The highway is way over budget, and the talk about fast ferries is in the air again. I sort of believe the Interim Auditor Ggeneral, put there by the government side of the committee to be the guy with the correct numbers, not some politician with a very great vested interest in twisting the numbers. Hey Interim means, better watch what you say or you are gone. I'm waiting for Kevin Kruger to sort it all out for us. Wait for it. I

Anonymous said...

Now we hear some polling firm telling us we really didn't expect the numbers to hold anyway. maybe the same polling company might send a note to the premier, and the VANOC crew. Earth to Gordon