State Cabinet abandons 2026 Adelaide Commonwealth Games bid
Adelaide’s bid for the 2026 Commonwealth Games has been officially dumped by the State Government. But it may not be quite game over just yet.
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Adelaide’s bid for the 2026 Commonwealth Games has been officially scuttled by State Cabinet because of a lack of required sports infrastructure and the $3.5 billion cost outweighing the long-term economic benefit.
Sport Minister Corey Wingard left open the option of bidding for the 2030 or 2034 Games as key sporting facilities are built.
This also leaves open the prospect of building a proposed multipurpose arena on the city railyards, the $1 billion-plus price tag of which was the major contributor to the Games’ projected cost.
The Sunday Mail this week revealed the Games bid was on the brink of collapse because an official report found the benefits were less than half the cost.
The key report from advisory firm Deloitte was considered by Cabinet on Monday but a final decision was reached today.
Mr Wingard said the State Government had consistently said it would not bid for the 2026 Games if there was no benefit to taxpayers but argued the State Sporting Infrastructure Plan due by year’s end would pinpoint necessary upgrades to facilities.
“We have always said there was a mountain of work that needed to be done to get SA ready for the type of games we would want to hold by 2026,” Mr Wingard said.
“Although we won’t be bidding for 2026, we have embarked on the State Sporting Infrastructure Plan, which will provide the path forward to ensuring we have the best facilities to attract big events to the state in the future.
“Unfortunately, the cost to the taxpayer was too high to bring the Games to South Australia by 2026, but we remain open to potential bids in 2030 and 2034 as key initiatives from the State Sporting Infrastructure Plan are rolled out.”
The city railyards arena proposal stemmed from a business case commissioned by the Adelaide Entertainment Centre operators as a potential replacement that also would house conventions, tennis, soccer, netball, basketball and other events.
It was expected to be the linchpin of a significant property development ahead of the Games, requiring covering the city railyards with a plaza and other buildings.
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”.
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Adelaide is the only mainland state capital not to host the Commonwealth Games, the next of which are set to be held in Birmingham, England, in 2022.
The 2030 event is set to go to Canada to mark the 100th anniversary of the birthplace of the Empire Games.
It is understood the Deloitte report found 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 have been operating costs such as bringing athletes to South Australia, security, road closures and other preparatory work.
This was said to be a “high-cost scenario” for the 10-day event, while the lowest possible operating costs of $300 million relied on considerable federal and local government funding.
However, there were said to be major risks to SA’s reputation of staging the Games for this low cost.
Critically, the report found the long-term benefits were outweighed by total cost.
This included building infrastructure such as the city railyards arena for at least $700 million and upwards of $1 billion as part of $2.3 billion capital expenditure.
The total long-term benefit to the state ranged 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 was a key part of a feasibility study — commissioned by the State Government in March — which considered potential economic benefits, population growth, new jobs and social benefits and risks associated with the event.
It is understood the scepticism of Treasurer Rob Lucas and other senior Government figures about the Games’ long-term benefits was confirmed by independent reports, including from Deloitte and consulting engineers Aurecon.
Proponents argued the $3.5 billion costing included a lot of infrastructure not strictly required to host the event.
Responding to the Sunday Mail report, Commonwealth Games Australia chief executive officer Craig Phillips said he was staggered by the $3.5 billion figure because that was significantly more than for the Gold Coast event in 2018.
Mr Phillips said the official Gold Coast post-Games economic report said the net operating cost to the Queensland Government was $950 million and infrastructure and facility spend was $390 million.
Opposition Leader Peter Malinauskas, also responding to the Sunday Mail report, said Labor would respect a State Government decision to withdraw from the bidding process if detailed analysis found the costs outweighed the benefits.
Mr Malinauskas said Adelaide would be the clear frontrunner if it chose to bid, but hosting the Games had to 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 SA households, hosting an event where the cost outweighs the benefit would be difficult to justify.”