Commonwealth Games 2026: Is this the reason behind increased project costs in Victoria?

Melbourne, Jul 18: Australia's Victoria dropping out as the hosts of the Commonwealth Games 2026 hasn't just raised doubts over the next edition of the games, in fact, it is also posing an existential crisis for the multi-sporting event.

It is the second straight instance in as many editions when a city withdrew from hosting the Commonwealth Games. Birmingham stepped in late to host the 2022 Games in England when Durban in South Africa dropped out in 2017 after facing financial troubles and missing key deadlines.

It was then in 2018, Birmingham and the British government joined hands to save the Games by pledging a combined $1 billion for the sporting extravaganza in 2022. The CWGF will struggle to find takers now as almost every state in Australia - who have been the biggest and most enthusiastic hosts - declined to host CWG 2026.

What did Victoria Premier Daniel Andrews say?

Citing a blowout in the projected costs, Victoria Premier Daniel Andrews on Tuesday (July 18) claimed his government last year agreed to host the next edition, "but not at any cost." Australia’s Victoria state withdraws as host of Commonwealth Games 2026, event's future in doubt

Andrews - who was highly optimistic 15 months back and promised 'a games like no other' at a stadium - said his government initially budgeted 2.6 billion Australian dollars ($1.8 billion) to stage the Games in five regional cities. However, recent estimates put the potential cost almost three times i.e. 7 billion Australian dollars ($4.8 billion).

Andrews - while declining to outline the reasons for the cost blowouts - told a news conference he'd notified Commonwealth Games organisers of his government's decision to pull out of the hosting contract.

He said, "Today is not about finding fault with those cost estimates... Frankly, AU$6-AU$7 billion for a 12-day sporting event, we are not doing that - that does not represent value for money, that is all costs and no benefit."

Commonwealth Games Federation blames Andrews Govt's decision for blowout

A bemused Commonwealth Games Federation, later, issued a statement saying it was taking advice on its options. The CGF said the estimated cost escalation was mainly due to the regional, multi-city host model and the Victoria government's decision to change plans for venues and include more sports.

The CGF statement said, "We are disappointed that we were only given eight hours' notice and that no consideration was given to discussing the situation to jointly find solutions prior to this decision being reached by the government."

The 2026 Games had been scheduled for March 17-29 in the regional centres of Geelong, Bendigo, Ballarat, Gippsland and Shepparton. The state government had promoted the multi-city model as a game changer, with the five regional centres hosting 20 sports and nine fully-integrated Para sports.

The government's website promoted Victoria 2026 as a showcase of "what makes the people of our state tick: our unity, our diversity, our sense of community, our welcoming attitude and our love of sport."

Victorian Government willfully ignored recommendations: CGF

Commonwealth Games Australia chief executive Craig Phillips said the government's decision was a "comprehensive let down" on a concept it had pitched to organizers. "The stated costs overrun, in our opinion, are a gross exaggeration and not reflective of the operational costs presented to the Victoria 2026 organising committee board as recently as June," Phillips said in a statement.

"Beyond this, the Victorian Government willfully ignored recommendations to move events to purpose-built (venues) in Melbourne and in fact remained wedded to proceeding with expensive temporary venues in regional Victoria."

Difference between the Olympics and CWG revenue models

The Gold Coast - which hosted the 2018 CWG - was part of the southeast Queensland bid that in 2021 was awarded rights to the 2032 Olympics.

Andrew Liveris, president of the Brisbane 2032 organizing committee, responded to the Victorian government's decision by saying the Commonwealth Games and Olympics run on different business models in terms of event delivery, infrastructure usage and commercial revenue.

The 2032 Olympics have federal, state and local government backing, and Liveris said the International Olympic Committee's contribution to running costs and support in terms of best practices from prior Games helped give organizers solid grounding.

"Brisbane 2032 was awarded the Games under the New Norm - a new efficient model for games delivery designed to drive legacy outcomes for the host region, before and after the Games," he said. "Brisbane 2032 has an 11-year runway for best-case planning and preparation."

With Inputs from Agencies