The road to Melbourne 2006
The spectacular, Australian-designed Olympics opening in Greece, with its mythical figures and athletes travelling through the air above the spectators, is a reminder of the liveliness and activity that the 2006 Commonwealth Games will be bringing to Melbourne.
In the last few years, TenderSearch has reported no fewer than 46 tender opportunities for the forthcoming Melbourne games, which will attract an estimated 4,500 athletes from 71 nations from 15-26 March 2006. The opportunities and business spinoffs extend far beyond just the bricks and mortar of actual games venues.
The Victorian Department of Education in July 2004 was taking tenders from creative groups to produce classroom material to provide linkages between aspects of the Commonwealth Games and relevant study areas, in both print and CD-ROM formats. Also in July, the Games organisation was inviting market research firms to provide a quantitative research service on business opportunities and marketing needs for the two years remaining in the leadup to the actual events.
The Office of Commonwealth Games Coordination (ACGC) feels an economic impact study will help communicate the projected direct and indirect economic dividends, social and environmental gains for Victoria in particular, and Australia in general, from hosting the games.
The market research and economic impact study are important elements of the Victorian Government's approach, both in deriving maximum benefits from the games and in helping to counter the usual criticisms of the direct costs. A mid-2004 study in NSW showed that some of the 2000 Sydney Olympic Games venues are still costing millions of dollars a year to maintain (though not all; some venue managers were turning profits from creative new uses for their facilities). So how will Victoria go?
Back in July 2002 the Victorian Government quoted a report on the 2002 Commonwealth Games in Manchester, UK, carried out by Cambridge Consulting. This estimated those games had secured more than $1.7 billion of public and private investment for Manchester. Due to the increased profile of the city (whose past image had been that of a utilitarian manufacturing centre), an extra 300,000 visitors would spend an extra $33.5 million every year in the region.
The trick in these studies is to separate out the extra benefits and revenues generated from the actual event, over and above what you'd get anyway from spending the money on something else. Capital expenditures such as the Games Village would generate the same returns and employment if they were just ordinary residential developments. Will the Melbourne 2006 Games add something to Victoria stemming specifically from the nature of the occasion?
Such flow-on benefits could include extra tourism lasting for some years afterwards through the games exposure (the "Barcelona effect"), subsequent revenue-generating events attracted by the improved facilities, the benefits of environmental cleanups and new passive recreation facilities, and extra export opportunities for Victorian firms, both in others parts of Australasia and abroad from expertise gained.
In the meantime, although many major contracts are well under way, there will be a continuing stream of new requirements from the Melbourne Games organisers over the next two years. On past performance, these are likely to cover most of the spectrum of commercial supplies and services.
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Christopher Jay is a writer for the Australian Financial Review. He is a regular contributor to its Tenderwatch column in the Friday Government & Business Section.
As published in TenderSearch Magazine - Spring/Summer 04 Issue
