IOC to cover VANOC deficit with a 20 m dollar guarantee

This summer, the IOC and VANOC reached an agreement for an extraordinary donation from the IOC in order for VANOC to overcome these economic obstacles, which are in part due to the economic downturn. Canadian media now reports that the sum donated by the IOC will be 20 million dollars.

The IOC money is very welcome as VANOC has suffered from the international economic downturn during the last year.

In December 2008 prospects were that the committee would have to make substantial cutbacks in the operating budget.

"Anybody who is not nervous today, I'd suggest they are asleep", said Jack Poole, the former chairman of the VANOC board, who tragically died last week after a battle with pancreatic cancer, according to the Globe and Mail after a budget revising meeting in December 2008.

However, according to the latest financial report revealed by VANOC, with the IOC guarantee the budget now seems to be balanced.

"With the budget we have, and as of today . . . we are not looking at significant changes to anything we're doing that a major stakeholder group would notice,'' Dave Cobb, executive vice president of VANOC told reporters after the release of the financial report. “We think we are through by far the worst of the economic slump, and (every sponsor) is current with its payments," Cobb said to Reuters.

According to VANOC, ticket sales are rising, Games luxury packs worth 265.000 dollars are starting to sell, and sponsors are showing interest again. All in all, the Vancouver Winter Games are running smoothly again, claim the organisers.

Confusion over costs

But unforeseen expenditures still lie ahead of VANOC, and British Columbia (BC), and not all numbers have been integrated in detail into the organiser’s latest financial report.

The VANOC budget is now balanced at 1.62 billion dollars.

Apart from the numbers figuring in this budget, regional and federal budgets will cover competition and accommodation venue construction, transportation infrastructure and security during the Games. Security costs alone are expected to run up to 850 million dollars. The exact budget for the Canadian provincial, governmental and state budgets for hosting the Games are hard to get an overview of. According to the BC province website estimates are 540 million dollars, according to a report carried out by former BC Auditor General, Arn van Iersel, the cost of the Games will amount to 2.4 billion dollars, while Games critics estimate that Canada’s total cost of being host will be 5.5 billion dollars.

Criticism of costs

Canada’s several groups of Games critics are arguing that Canadian taxpayers will be contributing more to the hosting of the Game than they are told in a time of crisis. The critics raised their voices last week when BC government admitted to have bought tickets worth almost 1 million dollars for business leaders and investors. Another 1.2 million dollars worth of tickets have been bought by state companies BC Hydro, ICBC and the BC Lottery Corporation.

Critics have also been outspoken about VANOC’s announced 28 million dollars  budget for employers’ bonuses for staying in the committee until after the Games, critique has been widespread.

"These bonuses clearly demonstrate that VANOC, in its mission to pull off the best games ever, has completely lost touch with the current economic reality facing all British Columbians," said Barry O’Neill, president of CUPE BC, BC’s largest labour union, who according to a press release also calls for a financial audit of VANOC.

Despite economic downturn, critique and hard to figure out numbers and thanks to the bailout from the IOC the Olympic torch was lit in Olympia this week and the Winter Games 2010 will start three months from now.

http://www.vancouver2010.com/dl/00/18/13/1023_annualreport_enfr_40d-FT.pdf>VANOC financial report