Expo may break budget, mayor says, vowing to open books

PUBLISHED : Monday, 02 August, 2010, 12:00am
UPDATED : Monday, 02 August, 2010, 12:00am

Shanghai mayor Han Zheng has admitted the World Expo may go over its 28.6 billion yuan (HK$32.8 billion) budget because of high operating costs.

In an interview with Taiwan CtiTV, the mayor defended the massive budget - already the largest and most expensive in the history of expos - and vowed to open the accounts books after a thorough audit.

Han's remarks were the first confirmation of widespread rumours that the expo's budget was spiralling out of control, and made an ironic contrast to the part of the official slogan that says 'run the expo with thrift'.

To date, officials have stated only that the 5.28 sq km park had cost 18 billion yuan to build, and the fair's operating budget would be 10.6 billion yuan. No breakdown of either figure has been issued.

Some unofficial estimates have put the total cost - including the massive indirect investment in upgrading the city's transport network and regional links, plus major renovations of key landmarks - as high as 400 billion yuan, equivalent to the country's annual military budget.

Han dismissed such estimates. 'If they keep saying so even after I give out the real budget, I will just turn a blind eye to the rumours.'

His admission of operational costs running beyond their 10.6 billion yuan budget appear to contradict assurances by Shanghai Communist Party secretary Yu Zhengsheng that the expo would break even.

But it reflects a clear acknowledgement of the extent of the extra measures organisers put in place to draw crowds to the 184-day event - which passed its halfway point on Saturday - following a disappointing opening month.

Visitor numbers picked up sharply in June after organisers added live entertainment, increased staff levels to ease the flow of queues at the most popular pavilions and boosted marketing in nearby provinces.

Income from ticket sales is also likely to have been affected by the city's decision - announced by Yu before the May 1 opening - to give away about 10 million free tickets to residents, one per household.

The total number of visitors passed the 35 million mark yesterday - a significant milestone given the target attendance of 70 million.

Officials warned at the weekend that large numbers of tourists coming to the city during the second half of the expo period were likely to increase the strain on the traffic network. Currently about 360,000 tourists arrive in the city daily, of whom 150,000 travel on group tour buses.

However, official gate figures are widely viewed with scepticism among staff at national pavilions, with many privately stating they believe the statistics are being inflated.

The record attendance for an expo was in Osaka, Japan, in 1970, which drew 64 million visitors.