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Organising body projects surplus revenue from Games

The projected budget of $1.6 billion (Rs 1,620 crore) for the 2010 Commonwealth Games may have raised doubts about the financial viability of holding such an expensive event.

delhi Updated: Oct 20, 2009 22:51 IST
Moushumi Das Gupta

The projected budget of $1.6 billion (Rs 1,620 crore) for the 2010 Commonwealth Games may have raised doubts about the financial viability of holding such an expensive event. But of the dozen stakeholders involved in organizing the Games—the Organizing Committee (OC)—is the body projecting a revenue surplus.

That’s right, unlike other stakeholders like Delhi Development authority (DDA), or the Delhi government, the OC expects to earn a revenue surplus, instead of a loss or even breaking even.

“According to our projections, we hope to generate an income of Rs 1708 crore from the games,” said AK Mattoo, Treasurer, CWG Organizing Committee.

Mattoo said one reason why it was possible for the OC to achieve revenue neutrality was that costs like infrastructure development and security were not loaded on to the OC.

“Agencies like Delhi government and DDA put up the physical infrastructure. We are getting money from the government as a loan which we will repay from revenue generated.”

The OC hopes to generate a bulk of its revenue from sponsorships, international and national broadcasting rights, merchandising and ticketing.

But, it will only be after October 2010 that Delhi would be able to figure out if the Games bought a financial windfall or dented the exchequer.

Money-breakers versus makers There are many examples from history on how cities hosting events like the Olympics have later faced financial disaster. After the 1976 Montreal Olympic Games, the Canadian city faced dents till 30 years after. The provincial Quebec government had to introduce a special tobacco tax to help citizens pay its Olympic investments.

Similarly, the budget for the 2008 Olympic Games in Beijing, China, was $1.6 billion but the city ended up spending $40 billion.

On the other hand, the 1992 Olympics, held in Barcelona, Spain were hugely successful, creating an economic legacy that lasted almost 15 years.

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