Venue cost of Vancouver 2010 Games up to $580M
CTV.ca News Staff
The cost of building venues for the 2010 Vancouver Winter Olympics has jumped to $580 million, pushing the cost of the Games up by 23 per cent.
Vancouver Olympic Organizing Committee CEO John Furlong said the $110-million increase is a product of the city's thriving building industry.
"There have been very significant increases in venue construction costs in B.C. since our initial capital budget was set," Furlong said at a news conference on Friday.
The booming construction market has caused a shortage of skilled workers and pushed construction costs up by an average of nine per cent in 2004, Furlong said.
From the total capital budget of $620 million, the Olympic organizing committee had originally earmarked $470 million for construction.
But Furlong said the construction estimates were calculated in 2002 dollars as required by the International Olympic Committee, with no adjustment for inflation or expected cost increases allowed.
The original project costs did not include major upgrading of a highway from Vancouver to the Whistler ski resort and a mass transit line between the Pacific Coast city's airport and downtown area. Both projects are now underway.
The Olympic committee is dealing with a situation that is also affecting builders and developers in the Vancouver area, according to one industry professional.
"They're looking for the skilled workers and they're going to be impacted by global demands on construction materials like every other project," Keith Sashaw of the Vancouver Construction Association told CTV Vancouver.
Shortfall
To cover the shortfall, Furlong said VANOC has formally requested an extra $55 million each from the federal and B.C. provincial governments.
Both governments have already pledged $310 million each toward the Games.
Any debt from the Games is supposed to be paid for by the B.C. provincial government.
Furlong said he believes the Games can be completed within a $139-million contingency fund created to cover potential cost over-runs.
Furlong said the new construction figure was finalized after the committee was able to find ways of cutting costs elsewhere.
"Understanding the heated construction environment we are operating in, our team spent the past two years rigorously examining every potential savings and efficiency," he told reporters.
"We've identified $85 million in venue cost efficiencies so far."
Warning
Furlong has repeatedly warned that the original budget for venues wasn't enough to meet rising construction and material costs.
"All along, our goal has been to find a way to deliver the magnificent venues we promised the world while trying to find savings and economies in every single project," he added.
Furlong said a study showed that the capital budget for the Olympics would have risen by 41 per cent, or $195 million, if savings weren't found on venues.
"I can tell you that we have been successful in keeping the cost increase in our venue construction program well below the 41 per cent increase projected in our consultant's report."
Furlong pledged organizers will do everything in their power to avoid further cost increases.
"We know conditions could change and so we're looking at every project and continuing to look for refinements, reductions in scope if we can do that and we're prepared to make the tough decisions to make the project work," Furlong told CTV Newsnet.
Furlong also said the organizing committee wanted to delay releasing the revised budget projection until after the Jan 23. federal election.
Link
CTV.ca News Staff
The cost of building venues for the 2010 Vancouver Winter Olympics has jumped to $580 million, pushing the cost of the Games up by 23 per cent.
Vancouver Olympic Organizing Committee CEO John Furlong said the $110-million increase is a product of the city's thriving building industry.
"There have been very significant increases in venue construction costs in B.C. since our initial capital budget was set," Furlong said at a news conference on Friday.
The booming construction market has caused a shortage of skilled workers and pushed construction costs up by an average of nine per cent in 2004, Furlong said.
From the total capital budget of $620 million, the Olympic organizing committee had originally earmarked $470 million for construction.
But Furlong said the construction estimates were calculated in 2002 dollars as required by the International Olympic Committee, with no adjustment for inflation or expected cost increases allowed.
The original project costs did not include major upgrading of a highway from Vancouver to the Whistler ski resort and a mass transit line between the Pacific Coast city's airport and downtown area. Both projects are now underway.
The Olympic committee is dealing with a situation that is also affecting builders and developers in the Vancouver area, according to one industry professional.
"They're looking for the skilled workers and they're going to be impacted by global demands on construction materials like every other project," Keith Sashaw of the Vancouver Construction Association told CTV Vancouver.
Shortfall
To cover the shortfall, Furlong said VANOC has formally requested an extra $55 million each from the federal and B.C. provincial governments.
Both governments have already pledged $310 million each toward the Games.
Any debt from the Games is supposed to be paid for by the B.C. provincial government.
Furlong said he believes the Games can be completed within a $139-million contingency fund created to cover potential cost over-runs.
Furlong said the new construction figure was finalized after the committee was able to find ways of cutting costs elsewhere.
"Understanding the heated construction environment we are operating in, our team spent the past two years rigorously examining every potential savings and efficiency," he told reporters.
"We've identified $85 million in venue cost efficiencies so far."
Warning
Furlong has repeatedly warned that the original budget for venues wasn't enough to meet rising construction and material costs.
"All along, our goal has been to find a way to deliver the magnificent venues we promised the world while trying to find savings and economies in every single project," he added.
Furlong said a study showed that the capital budget for the Olympics would have risen by 41 per cent, or $195 million, if savings weren't found on venues.
"I can tell you that we have been successful in keeping the cost increase in our venue construction program well below the 41 per cent increase projected in our consultant's report."
Furlong pledged organizers will do everything in their power to avoid further cost increases.
"We know conditions could change and so we're looking at every project and continuing to look for refinements, reductions in scope if we can do that and we're prepared to make the tough decisions to make the project work," Furlong told CTV Newsnet.
Furlong also said the organizing committee wanted to delay releasing the revised budget projection until after the Jan 23. federal election.
Link
