Calculating the cost of the games

While no one can deny that Mani Shankar Aiyar has a tendency to shoot his mouth off, the second part of his controversial statement on the Commonwealth Games (CWG) is relevant for future decisions. “Basically, I will be very unhappy if the Games are successful because they will start bringing Asian Games, Olympic Games and all these.”

It just so happens that Indian Olympic Association (IOA) has bid for 2019 Asian Games. How much is that going to cost? How much will CWG cost? We don’t know and it is an unfair question to ask. After all, we still don’t know how much Asian Games of 1982 cost. Estimates range between Rs 700-1,000 crore.

We don’t know because there are different types of expenditure—roads and transportation, offices and commercial space, hotels, sports infrastructure, housing, communications and other services. Direct expenditure is difficult to pin down and government window-dressing of accounts doesn’t help. For CWG, we are roughly talking about Rs 140 crore for the bid, Rs 2,100 crore as a central budget allocation for 2010-11, Rs 4,000 crore spent by NDMC and MCD, Rs 400 crore for opening and closing ceremonies, Rs 3,400 crore for constructing and renovating stadiums, Rs 175 crore for the organising committee’s (OC) offices, Rs 500 crore for new parking, Rs 350 crore for streets/footpaths, Rs 1,100 crore for the village, Rs 100 crore for coverage and an additional Rs 15,000 crore spent by Delhi on infrastructure. That’s close to Rs 30,000 crore and there are items one hasn’t included. Plus, there will be cost escalations. So we end up spending close to Rs 40,000 crore. If we spent Rs 700 crore in 1982, Rs 40,000 crore is a more realistic figure than the Rs 3,500 crore that floats around. Capital is scarce in developing countries and opportunity costs of capital are high. Costs of developing infrastructure are also high. Also, revenue sources are scarce. Barring Los Angeles in 1984, there is not a single instance of such mega sports events having generated surpluses.

Therefore, these are public resources, even if sponsorships from PSUs masquerade as non-public sources. While there is no longer any point in asking whether we should have spent Rs 40,000 crore on CWG, we should certainly ask whether we can make better use of such money in the future.

The point isn’t so much corruption, bribery and leakage, instances of which may be surfacing now. If...