King Kaufman's Sports Daily
Huge London Olympics cost overruns are right on schedule. Plus: Coach K "lifts" a chin.
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Nov. 29, 2006 | A friend of mine whose family has battled indifferent and incompetent state and local bureaucracy through four domestic adoptions punctuates every horror story by saying, "And every politician who talks about how children are the most important thing is lying."
I have a corollary. Every politician, or anybody else, who says that some sports arena or sporting event is going to pay huge dividends to a city, county, state or province is lying.
Latest example, your 2012 Olympic host city, London.
The British government said last week that the estimated costs for building the facilities for the Olympic events had risen by about 40 percent. Don't worry, though. It's still early. The costs will rise a lot more by the time 2012 comes around.
So the original $4.7 billion estimate is now $6.4 billion. Hey, what's $1.7 billion when you're talking about the human drama of athletic competition? Especially when you consider that we're talking about pounds, so the increase is only 900 million. Peanuts!
Here's my favorite part of the Reuters story about the cost overruns: "The new estimate for the Olympic Park includes a 400 million pound fee that will be paid to consultants responsible for making sure costs come in on budget, [Sports Minister Tessa] Jowell told a parliamentary committee."
That's about $779 million. So the fee to ensure that cost overruns stay under control constitutes 44 percent of the overrun itself. So far.
Don't worry, though. That percentage will shrink.
But it's OK because the whole reason for this huge building project is to revitalize the area of Stratford, East London, which has been scuffling economically for a little while now. Like centuries.
The original price tag for that renaissance was an estimated $6.6 billion, which you'll recognize as being about $200 million more than the new estimate for just the sports facilities, before a farthing has been spent on a massive security effort, a huge value added tax bill or any other ancillary cost.
When you consider that they're paying some consultants almost four times that much to make sure nobody wastes money, you understand that $200 million won't go too far. $200 million is three business lunches and a taxi ride for those consultants.