Adelaide’s 2026 Commonwealth Games bid on brink of collapse because of $3.5 billion cost
Adelaide’s bid for the 2026 Commonwealth Games is on the brink of collapse with an official report revealing the $3.5 billion cost considerably outweighing long-term benefits to SA.
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Adelaide’s bid for the 2026 Commonwealth Games is on the brink of collapse because an official report finds the $3.5 billion cost would considerably outweigh the long-term benefits to the state.
State Cabinet is expected to decide the bid’s future as soon as tomorrow morning, when ministers will consider a key report from advisory firm Deloitte which is understood to find the Games would not deliver an economic uplift.
This is likely to scuttle the 2026 option, given Sport Minister Corey Wingard has declared the bid would go ahead only if the Games provided an economic boost, but potentially allow for a revived candidacy in later years.
Opposition Leader Peter Malinauskas told the Sunday Mail Labor would respect a State Government decision to withdraw from the bidding process if detailed analysis found the costs outweigh the benefits.
It is understood the Deloitte report finds the total capital and operating cost of staging the Games in Adelaide would be up to $3.5 billion, of which $1.2 billion would be operating costs such as bringing athletes to South Australia, security, road closures and other preparatory work.
This is said to be a “high-cost scenario” for the 10-day event, while the lowest possible operating costs of $300 million rely on considerable federal and local government funding.
However, there are said to be major risks to South Australia’s reputation of staging the Games for this low cost.
Critically, the report finds the long-term benefits are outweighed by total cost.
This includes building infrastructure such as a city railyards arena for at least $700 million and upwards of $1 billion aspart of $2.3 billion capital expenditure.
The total long-term benefit to the state ranges between $380 million and $1.2 billion – less than half the $3.5 billion total Games cost at the high end, according to the report.
The report is a key part of a feasibility study, commissioned by the State Government in March, which has considered potential economic boost, population growth, job creation and social benefits and risks associated with the event.
Mr Wingard in March declared Adelaide’s bid would go ahead only if hosting the Games would “provide an economic boost and create legacy projects which will benefit our state into the long-term future”.
The Sunday Mail also has been told the scepticism of Treasurer Rob Lucas and other senior government figures about the Games’ long-term benefits has been confirmed by independent reports, including from Deloitte and consulting engineers Aurecon.
Asked to comment on the Deloitte report and whether a bid would be in the state’s interest, Mr Wingard said only: “The State Government is currently considering the feasibility of a bid for the Commonwealth Games. A decision will be made in due course.”
Commenting to the Sunday Mail last month, Mr Wingard left open the prospect of Adelaide bidding for the Games “in either 2026, 2030 or 2034”.
Mr Malinauskas said Adelaide would be the clear frontrunner if it chose to bid but hosting the Games must deliver a clear benefit and value for taxpayers’ money.
“If detailed analysis finds the costs outweigh the benefits, the Opposition would respect a decision by the government to withdraw from the bidding process,” he said.
“With this year’s State Budget delivering a dramatic increase in debt and increasing taxes on South Australian households, hosting an event where the cost outweighs the benefit would be difficult to justify.”
The Sunday Mail late last month revealed a decision on whether to press ahead with the Adelaide bid was expected within days as the feasibility study, which was due by August 31, was delivered to the Government.
It is understood the Deloitte report also canvasses the possibility of $250 million in federal funding to supplement the Games’ cost but stresses this is not guaranteed.
A Queensland Government report forecast the Gold Coast 2018 Commonwealth Games would boost that region’s economy by $1.7 billion but Griffith University researchers in April said many businesses did not do as well as expected and some key business districts had been “virtual ghost towns”.
However, the Griffith researchers also found the Gold Coast had benefited from infrastructure improvements including light rail, road and sporting venue upgrades plus new public spaces.
Adelaide is the only mainland capital yet to host the Commonwealth Games, the next of which are set to be held in Birmingham, UK, in 2022.
The 2030 event is set to go to Canada to mark the 100th anniversary of the birthplace of the Empire Games.