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project management resources

Their estimation results show that hosting the Olympics provided a significant boost to
real GDP growth between five and two years before the Games are held
However, there is considerable uncertainty
about the magnitude of these effects, which for the following reasons may well be
smaller than in the case of past host countries. First, many previous Olympic Games
were held in countries that were developing at the time rather than countries that were
already developed. In developing countries, the impact of social infrastructure
investment on the economy as a whole (that is, the marginal productivity of social
infrastructure) is likely to be relatively large.4 Therefore, using the average of the
impact for previous host countries as a yardstick may somewhat overestimate the
magnitude of the effect.
Further, megaevents
generate additional consumption such as energy and water usage, transport and
food retail, which in turn create waste (e.g. rubbish, sewage), as well as congestion
(e.g. road traffic, over-crowding on public transport, people congestion in public
spaces and retail areas). For instance, electricity consumption during the FIFA 2006
World Cup in Germany amounted to 12.6 million kWh while the estimated carbon
footprint was 92,000 tonnes of greenhouse gas emissions (Öko-Institut 2004),
compared against 2.7 million tonnes of emissions at the FIFA 2010 World Cup in
South Africa (Econ Pöyry 2009).
Organizing risks
institutional risk: that is, risks to the activities of organisations. In the Olympic
context, a wide range of stakeholders are put ‘at risk’ throughout the course of event
planning, procurement, delivery and operations. These include the IOC as its
sanctioning authority, the host government and organising committee (‘OCOG’), the
domestic intelligence agencies and police (responsible for security of the event),
international sports federations, engineering and construction firms (contracted to
design and build stadiums and facilities for the event), public health agencies,
transport authorities, emergency services, international regulatory bodies such as the
World Anti-Doping Agency, private investors, corporate sponsors, broadcasters,
insurers and so on. Institutional risks can take the form of financial and legal
liabilities, threats to reputation or legitimacy, operational vulnerabilities to disruptions
or critical failures, and accountability to political masters or the wider public. An
example of institutional risk is the potential for the loss of broadcasting revenues
accruing to the IOC and OCOG due to event cancellation (with broadcasters in turn at
risk of lost advertising revenues). Another is the potential reputational cost to the host
government of an unfinished stadium or a serious security breach.
potential social, economic or environmental costs and
adverse impacts, i.e. risks.
Risk and Mega-Events
•Mega-events as a target for threats (e.g. terrorism, cyber attacks,
fraud, illegal betting) and as a venue for hazards (e.g. natural
disasters, transport accidents, contagious infections and disease).
•Mega-events as a source of disruption, displacement and strain on
existing infrastructure and services (e.g. traffic volume, population
movements, airports and passport controls).
•Mega-event organisation as a source of risk for agencies and other
stakeholders (e.g. financial, operational, reputational risk).
•Mega-events are subject to a high degree of complexity, technical
uncertainty and conflict, leading to the under-estimation of risks and
over-estimation of benefits in planning and project management.
•Mega-events vulnerable to ‘normal accidents’: i.e.
incomprehensible ‘emergent’ properties of complex systems
Costs for hosting the Games fall into the following three categories, established by the IOC:
1. Operational costs incurred by the Organising Committee for the purpose of “staging” the Games. The largest components of this
budget are technology, transportation, workforce, and administration costs, while other costs include items like security, catering,
Operational costs make up a smaller but still significant chunk of
hosts’ Olympics budget. Security costs have escalated quickly since the
9/11 attacks—Sydney spent $250 million in 2000 while Athens spent
over $1.5 billion in 2004, and costs have remained between $1 billion
and $2 billion since.
ceremonies, and medical services. These may be considered the variable costs of staging the Games and are formally called "OCOG
costs" by the IOC.
2. Direct capital costs incurred by the host city or country or private investors to build the competition venues, Olympic village(s),
international broadcast center, and media and press center, which are required to host the Games. These are the direct capital costs
of hosting the Games and are formally called "non-OCOG direct costs."
3. Indirect capital costs such as for road, rail, or airport infrastructure, or for hotel upgrades or other business investment incurred in
preparation for the Games but not directly related to staging the Games. These are wider capital costs and are formally called "nonOCOG indirect costs."
cost overruns
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