By Andrew Mitchell
Venue construction for 2010 remains on schedule and on budget, according to the latest quarterly report issued last week by the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Games (VANOC).
There have been no new increases in the budget since VANOC went to the provincial and federal governments in February of 2006 to ask for an additional $110 million for venue construction, on top of the original budget of $470 million. At the time VANOC said they could not have anticipated the soaring cost of steel and concrete on the global market, or shortage of skilled workers to draw from.
VANOC did withdraw $2.8 million from the $66.8 million contingency fund that was built into the venue construction budget over the last quarter, as a result of shifting some construction related staffing costs from the Games’ operating budget to the venue budget. In the same quarter, ending April 30 they also realized approximately $800,000 in savings for the renovation of the Pacific Coliseum, all of which was put back into the contingency fund.
With many projects nearing completion — all but three venues are expected to be complete by the end of 2007, and the rest by mid-2008 — the contingency fund is still healthy with $53.3 million available.
“This contingency was set up from the beginning, because it was fairly clear to everyone with the market we are working with that it made sense to have a contingency for each project and a central contingency to protect the overall budget,” said VANOC chief financial officer John McLaughlin.
“It’s a competitive marketplace, and a heated market — I doubt any project would be constructed today without a contingency attached to it.”
Since venue construction began VANOC has spent a total of $306 million on construction costs, including $63 million in the third quarter. Exact figures will be confirmed with the release of VANOC’s next audited fiscal report in October.
According to McLaughlin, the operating revenues are in good shape with a surplus cash balance of $84.3 million — including an advance payment from the IOC of $68.4 million, domestic sponsorship revenue of $16.3 million, and other revenues of $3.3 million in the last quarter.
Most of that money is accounted for as the cost of operations is expected to increase over the next few years leading up to the Games. In the last quarter alone VANOC hired 67 new employees, bringing total staff to 375.
However, as costs increase for the organization building toward the Games, revenues should also increase with the addition of new sponsors. In the January to March period VANOC signed new agreements with Weston Bakeries, Nortel, Jet Set Sports, Air Canada, TransCanada, and the Insurance Corporation of British Columbia. VANOC now has 23 signed sponsors.