Mint Explainer: Can India afford the Olympics?

Why countries don’t bid for Olympics

Host nations often hope that the Games will bring some obvious benefits – from raising its international stature to boosting tourism. But it’s far from obvious at the moment that it actually happens on the ground.

The biggest hurdle to hosting the Games is the prohibitive costs. Over five decades, host cities have struggled to raise resources to afford the Games. The 1976 Montreal Games left the city buried in debt, taking it almost three decades to recover.

Such expenses have made countries around the world wary of bidding for the Olympics. Los Angeles was the only bidder for the 1984 Summer Games, but managed to earn a profit. It used its existing sports infrastructure to host the Games, instead of investing billions in building new infrastructure, cutting costs significantly.

It encouraged other countries to throw their hats in the ring for future Olympics, but cities tried to outbid each other. Costs ballooned as hosts pumped in enormous amounts to overhaul their sports infrastructure – it was almost $50 billion for the 2014 Winter Games in Sochi, Russia and some $20 billion dollars for the 2016 Summer Games in Rio de Janeiro.

This increased the wariness around hosting Olympics, and Paris and Los Angeles were handed over the 2024 and 2028 venues without much competition. Lack of bidders may work in India’s favour for the 2036 Games.

Do the hosts benefit from the Olympics?

Los Angeles made a surplus of almost $500 million from tourism and broadcasting rights in 1984. South Korea was left with a surplus of $55 million, benefiting from tourism. But most Olympics have not been money-spinners and can be a burden for cities.

There is little evidence to show that Olympics boosts tourism. While Barcelona reported an uptick in tourism after the 1992 event, and Sydney after 2000, many other cities saw negligible impact of the Games, including Beijing and London.

And then, much of the massive sporting infrastructure built sits idle after the event, costing megabucks to keep it running. Montreal spent millions to maintain its Olympic stadium while Beijing reportedly spends $11 million a year on its Bird’s Nest Olympic Stadium. Rio de Janeiro converted its $700 million athletes village for 2016 Games into luxury apartments and they are now shuttered. There are even instances of host cities dismantling their Games infrastructure after the event.

What can India learn from the global experience?

There are enormous costs involved in hosting Olympics today, and even the 2020 Tokyo Olympics saw a 100% cost overrun to over $15 billion. Rio de Janeiro needed a massive bailout from the central government, while Olympics in 2004 nearly landed Greece in bankruptcy.

So, managing costs will be the key. And, for that, the strategy adopted by Los Angeles has significant takeaways for the world. Building on existing sporting infrastructure can lower costs significantly.

Upcoming stadiums at Motera and Narapura in Ahmedabad will be world-class. However, Delhi already has a well-spread out sporting infrastructure built over the decades – to host athletics and hockey to football and tennis – going back to the Asian Games in 1982 and the Commonwealth Games in 2010. In fact, a ₹8,000 crore tender was floated in June 2020 for a makeover to the Jawaharlal Nehru Stadium.

Delhi’s physical infrastructure too is superior to that of other Indian cities, from the metro and roads to airport and hotels. Hosting the Olympics in Delhi may help in cutting operational costs significantly, making the event commercially successful.

GAME OF THORNS

* Cost of hosting an Olympics has soared

*Host cities spend billions in building infrastructure

*Most Olympics hosts struggle to make profits

*Los Angeles cut costs by using existing infrastructure, generating a surplus

*In India, Delhi appears to have best infrastructure for Olympics