Cost overrun for Olympic Games


 Purpose of project

We are here to converse about the actuality that London economy has had face due to the cost overrun of the Olympics games 2012. Well as everyone is relatively familiar with the global recognition of Olympics games, so the amount used up on organizing this world’s most popular sports event is no more difficult to estimate. The researchers of Oxford university and Bent Flyvbjerg ( the cost overrun expert), had estimated the expense amount of Olympics games for the year 1960 to 2012 and stated that the economy budget of London was assumed more than the Beijing, Montreal, and Barcelona. The costs of building up the Olympic stadium were 101% higher than the economical budget of London. This resulted the unrecoverable loss in the country’s economy. The estimation results and reports were personally redesigned and represented by the organizing authorities of Olympics games by stating that “the balance sheet estimates were wrong”, just to keep them on the safe side to avoid critical situation, which was created by public account committees. Well, the main objective of the project was to focus on the critical issues arisen by this economic pressure and to bring the real face of organizing authorities in front of the general public.

 Project outcome

It was estimated that for last 5 decades, the average cost overrun was at 179% of the London economy. Well, after a detailed research from not only London, but including all other cities where the Olympic games were organized in past years, it was apparent to know that the overall expenses of the organization of Olympics games were estimated as the cost overrun budget on the economy of host countries.

 Lesson learned

 Fact about Olympics cost overrun

After the comprehensive research, we came to the conclusion, that the overall previous Olympics games balance sheet were completely underestimated. In the 1976 Olympics event, the huge debts were paid in 30 years by the people. Although along regular concern with Olympics cost overrun, this matter doesn’t seem to be resolved.

 Cause of cost overrun

These factors, which basically cause the cost overrun on a budget estimated from 1976-2012, the final cost was 200% higher.  The cost inflation in project management, decision making, bidding, arranging and all other related terminologies were oversight and the poor management, political policies and biased optimism was the reason of hiding the actual cost overrun form public account committees. The fictional characters and cost estimates usually stated just to cover the planning and budgeting methods. Well, to provide the assurance to an external audience, the protocols and planning processes are often expressed in term of risks.

 Fantasy expressions of cost overrun

Although some of the highlighted strategies, which assumed as the risk expressions of cost overrun of budget are:

  • Poor management
  • Scope creep
  • Bidding process
  • Risks
  • Fantasy documents

 Revision needed

We must have to consider those factors, which basically results the cost overrun on the economy budget faced by every host country, which basically organizes the Olympics games. For this, the overall systemic analysis is needed to control over the causes of cost overrun.

Article Cited

http://blogs.lse.ac.uk/politicsandpolicy/archives/25438

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