The great race

PUBLISHED : Tuesday, 14 February, 2006, 12:00am
UPDATED : Tuesday, 14 February, 2006, 12:00am

From his 40th floor office in central Melbourne, state treasurer John Brumby enjoys a spectacular view of the city's tram lines, parks, heritage buildings and, beyond, Port Philip Bay and the blue smudge of the Southern Ocean.

'Isn't Melbourne looking great,' he said, gazing at the city below. 'Perhaps I'm biased. Touch wood, everything has gone according to plan so far.'

The minister's view may not extend to China, but he believes his city's experience in organising next month's Commonwealth Games can provide crucial insights for Beijing as it prepares to host the 2008 Olympic Games.

The Commonwealth Games, which run from March 15-26, will be the largest multi-disciplinary sporting event in the world before the Beijing Olympics.

Organisers say the event will be spread across more than 30 venues and beamed to about 1.5 billion television viewers around the world.

The Commonwealth Games may be of marginal interest to China - they bring together Britain and nearly 70 of its former colonies in what critics say is an outdated legacy of empire - but their progress will be keenly watched by Beijing's Olympic officials.

Delegates from the Beijing Organising Committee for the Olympic Games (Bocog) have visited Melbourne to inspect preparations and a further 100 officials will watch the games.

The delegates will examine areas such as security, catering, waste management, stadium seating and traffic management.

Melbourne is convinced it can successfully host a huge sporting event without breaking the bank.

'The Commonwealth Games could act as a useful learning experience for Beijing in the run-up to the 2008 Olympics,' Victorian Premier Steve Bracks said recently. 'Our experience with large-scale events puts us in an ideal position to provide technical expertise and deliver services for 2008.'

Organisers have identified four key factors which they say will make the games a success: keeping to budget; the proximity of sporting venues; avoiding the construction of white elephant infrastructure projects; and maximising trade opportunities.

Ron Walker, chairman of the organising body for the Commonwealth Games, is adamant there will be no debt to Melbourne or Victoria once the event is over.

'Our balance sheet will be neutral,' he said. 'We'll either break even or have a little bit left over.'

Mr Walker, a businessman and former Lord Mayor of Melbourne, is only too aware that Australian media would pounce on any lingering debt.

'They would remember us for the debt, not the orgasm of the closing ceremony or the joy of the games.'

The Olympics have bled many cities dry: they nearly bankrupted Montreal in 1976; Athens spent US$12 billion on the event in 2004, a massive 5 per cent of Greece's gross domestic product; Barcelona is still paying off its debts from 1992; and Australia learned a lesson or two from the 2000 Sydney Olympics, which also resulted in debt.

A study by accounting firm KPMG suggests the Commonwealth Games will pump about A$3 billion (HK$17 billion) into Victoria's economy, attract 90,000 visitors and create 13,000 jobs. Ticket sales - a million have been sold so far - and corporate sponsorship provide the revenue base, and financial prudence has been strictly adhered to.

'We've been watching our costs all along,' Mr Walker said.

Chinese officials have shown interest in the balance sheet. 'They are keen to look at how we are financing it, our cost control, our systems,' he said.

While the Olympics will be a symbol of national pride for China, and a chance to display to the world its growing self-confidence, Chinese officials have been more than willing to listen to foreign advice.

'The Chinese, in my experience, have always been hungry for information. They have always had foreign experts in their country, and this is no different,' Mr Walker said.

Unlike Beijing, however, Melbourne has a proven track record of organising large-scale sports events and making a profit from them. It hosted the Olympics in 1956 and poached the Australian Grand Prix from Adelaide in 1996. Cricket matches and Australian Rules Football grand finals attract crowds close to 100,000 to the city's stadiums.

'We do sporting events better than anywhere else in Australia, and arguably anywhere else in the world,' Mr Brumby said. 'We expect companies here to pick up a large amount of work in Beijing because they have the experience.'

China, Mr Brumby noted, was Victoria's second-largest trading partner and was expected to take the number one position next year. A decade ago it didn't feature in the top five.

Indeed, officials say the Commonwealth Games is not just a sporting event, but a huge business networking opportunity.

Melbourne has established Business Club Australia to bring together companies from all 71 nations of the Commonwealth. The idea is that in the weeks before the games begin, companies sign up to a free online register that enables them to network with like-minded enterprises. Similar networks operated during the Sydney Olympics and 2003 Rugby World Cup, held in Australia's major cities.

Together, those two events generated an extra A$1.6 billion of exports for Australian companies.

Nearly 5,000 firms have joined the scheme since it was launched last March, half of them Australian, half from other Commonwealth countries. Businesses in India, Pakistan, Malaysia and Singapore have been particularly keen to sign up.

In addition to online networking, more than 30 business breakfasts and seminars will be held in Melbourne during the games. There will be particular emphasis on finance, biotechnology, tourism and hospitality, and construction.

'It's a great opportunity to do a lot of business,' said Qantas chairwoman Margaret Jackson, one of Australia's few female senior executives and head of the Business Club.

'It's aimed at small- to medium-sized businesses because most large firms can take care of themselves,' she said. 'It's a one-off opportunity to have people from all over the Commonwealth meet in circumstances in which they wouldn't otherwise meet.'

Businesses don't even have to attend the games to take advantage of the scheme - they can simply access the database online.

Melbourne also hopes the games will increase its profile overseas. As a brand, the city will receive enormous exposure to a huge TV audience.

'The challenge is to leverage those opportunities in the six to 12 months immediately after the games,' Mr Brumby said. 'You have to translate the buzz generated by the games into business opportunities.'

Unlike Sydney in 2000, Athens in 2004 or Beijing in 2008, Melbourne was blessed with world-class sporting facilities even before the city was awarded the Commonwealth Games.

The city is passionate about cricket, Australian Rules Football, motor racing and tennis, and has superb facilities close to the city centre. Of the 16 sporting disciplines at the games, 14 will be staged at venues within 3km of the central business district.

Only A$500 million has been spent on upgrading existing facilities, a far cry from an estimated A$30 billion Beijing is expected to spend.

The Australian city's most famous venue, the Melbourne Cricket Ground, is a five-minute walk from the cafes and restaurants of the city centre.

It is linked by a pedestrian-friendly walkway that stretches more than 500 metres across busy roads and railway tracks. Close to it, on the banks of the Yarra River, is the Rod Laver Arena, which hosted the Australian Open tennis tournament last month, and another large stadium known as the Multi-Purpose Venue.

The cricket ground, which dates back to 1853, has just had a A$490 million upgrade, jointly paid for by the Melbourne Cricket Club and the state government of Victoria. Such public-private collaborations have helped to reduce the cost of hosting the games.

'If you were to build all these venues new, they would cost billions of dollars,' Mr Brumby said. And if you don't have the luxury of ready-made sports venues close to the city centre, as in Beijing's case, 'you have to make sure your transport links are good. That is absolutely key', he added.

'The buzz word is legacy,' said tour guide Anthony Grace as he showed visitors around the newly spruced up cricket ground. 'The improvements to existing venues are not just for the games. They are designed to last for the next 50 years or more.'

Mr Grace, who specialises in sports venues, said: 'The key is to avoid white elephants. Melbourne didn't want to spend a fortune building new venues or upgrading old ones if they weren't going to be used after the games.'

A good example is the Athletes' Village, which has been built on 20 hectares of waste ground in the inner suburb of Parkville, 5km from the city centre. A public-private partnership, it cost about A$120 million to build and comprises 1,000 homes, 200 of which have been set aside for low-income families.

The athletes have yet to arrive but already many of the apartments and flats have been sold to buyers who will move in once the games are over.