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Tuesday, November 16, 2010

CWG 2010 Reflects Huge Losses

Looking at the magnificent opening and closing ceremonies, smooth organization during the event, the enthusiasm of the spectators, and the hype around the 19th Commonwealth Games, it is hard to imagine how miserably it fell behind its goals in financial terms.
 

Let us look at the revenue figures first. The Organizing Committee for the Games has expected that the final collections are likely to be Rs. 600 crore or less, against a target of Rs. 1,820 crore. This includes income from sponsorship (Rs. 350 crore) and TV rights (Rs. 215 crore). The Sports Minister informed the Lower House, “There were no earnings from advertisements as such. From the sale of tickets, OC earned 39.17 crore. From sponsorship amount, Rs 114.15 crore was received against the contracted value of Rs 375.05 crore and from international TV rights, Rs 173.71 crore was received against the contracted value of Rs 213.45 crore.” In effect, apart from the disappointing ticket sales and sponsorship, the OC has not been able to recover full amount on its commercial contracts. However, the organizers, Government, and public corporations are not missing a chance to clamor about their individual success stories. In contradiction to the Sports Minister’s address, Door Darshan, the official broadcaster of the event, is claiming to have met its advertising target of Rs. 100 crore. On the other hand, Delhi Transport Corporation says it has added an additional Rs. 60 crore to its kitty by loaning out buses during the Games.

The biggest surprise comes from the costs side. The official expenditure by the OC, according to Kalmadi, includes a loan of Rs. 1,669.42 crore from the Government, overlay expenditures (Rs. 557.40 crore), and expenditure on equipment (Rs. 81 crore). Even if we consider only the official figures, the net loss for hosting CWG comes to approximately Rs. 1,707.82 crore. This also translates into an approximate cost overrun of over Rs. 408.82 crore. But, this appears just the tip of the iceberg when the unofficial estimate of the ‘actual’ total costs is being placed anywhere between Rs. 30,000 crore and Rs. 70,000 crore! (Watch out this space for more on CWG 2010)

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