The City of Oslo’s bid to host the Winter Olympics (OL) in 2022 has satisfied a group of independent auditors, even though they boosted the Games’ expected cost. The auditors otherwise didn’t find any “substantial weaknesses” with the bid, which still must secure a state financial guarantee.
A group of risk managers headed by DNV GL, the certification firm formerly known as Det Norske Veritas, examined the bid at the request of the Norwegian government, which will ultimately be responsible for paying the costs of what the Norwegians simply call “OL.” The group, including ÅF Advansia and Samfunns- og Næringslivsforskning, said the bid meets the demands of the International Olympic Committee (IOC) and was basically sound.
Anders Magnus Løken of DNV GL said the bid was “largely in accordance” with the experts’ evaluation of how the Winter Olympics could be carried out and what it will cost. There was, however, a margin of error that prompted the auditors’ group to raise the amount of the state financial guarantee that will be needed, to NOK 35.1 billion.
The Oslo2022 committee that’s already spent more than NOK 150 million working on the OL bid initially said the Winter Olympics would cost between NOK 20 billion and NOK 30 billion. The City of Oslo, the national athletics federation (Norges Idrettsforbund) and the Olympic and Paralympics committee ended up asking for a state guarantee of NOK 33.7 billion (USD 5.6 billion).
The DNV-led auditors group thought that was too low and that an Olympics in Oslo will need another NOK 1.4 billion, for a total of NOK 35.1 billion. The group charged with quality-control of the bid also determined that Norwegian taxpayers will need to contribute NOK 21.7 billion, with ticket sales and sponsor income providing the rest. No private sponsors have been lined up as yet.
That’s still a lot of money, argue opponents of the project who have feared budget overruns. It’s also much less than what’s been spent on recent Olympic projects, not least the upcoming Olympics in Sochi, Russia. The Norwegians also underestimated the final cost of the last Winter Olympics they hosted in 1994, but city officials, local politicians and other OL boosters claim Oslo will put on a “modest” OL that will stay on budget.
Now it’s up to state politicians to approve the ambitious project, and whether it’s worth NOK 35 billion at a time when many municipalities in Norway are faced with budget cuts. The DNV-led group handed over its report to Thorhild Widvey, the government minister from the Conservative Party who’s in charge of culture and sports. She will now be responsible for coordinating the next round of debate on the project and whether the new conservative government will itself support it. A state financial guarantee must be approved by the Parliament no later than January 2015.
Widvey has been non-committal to date, while Finance Minister Siv Jensen from the Progress Party has been negative towards spending so much money on an Olympics. Widvey told NRK that the auditors’ presentation on Friday “showed with all clarity that arranging an Olympics is a complex affair that will affect many sectors of the community.”
She promised to thoroughly study the auditors’ report, calling it “a very important foundation for our evaluation of whether we will offer a state guarantee.” While a majority of Oslo voters approved the OL project at a referendum in September, there’s been opposition to it from around the country and the costs remain the biggest issue. The City of Oslo, meanwhile, must submit its bid to the IOC by March 14.