East Asian Games cost estimates widely out
The government underestimated the expense of hosting the 2009 East Asian Games by 20 per cent - and its predictions of income were even less accurate, the Audit Commission revealed.
Instead of the predicted HK$117 million in revenue, the event grossed 54 per cent more: HK$180 million, the audit said.
The city's first-ever major international multi-sports event brought spectacular moments and appreciative crowds to the Hong Kong Stadium.
But the Director of Audit yesterday criticised significant variances between estimated and actual financial figures, and said the government had not understood the full implications of hosting the games.
'In the funding paper submitted to the Legco's Finance Committee [FC] in January 2006, the administration estimated the gross expenditure for organising and implementing the 2009 East Asian Game would be HK$240 million,' the audit report wrote.
'In the event, the actual expenditure was HK$291 million,' the report added, a variation of 21.3 per cent.
The commission noted that besides the HK$123 million the government spent on direct subsidies to the East Asian Games company, Sports Federations and Olympic Committee of Hong Kong, the Electrical and Mechanical Services Departments and RTHK, various government bureaus and departments spent another HK$132.8 million directly on the games. The commission did not explain why this did not add up to HK$291 million.
'Audit considers that to enhance public accountability, the administration, in seeking the FC's acceptance in principle for making a bid and funding approval for hosting a similar sports event in future, needs to provide an accurate estimate of the direct expenditures for the event as far as possible,' the reports said.
Accepting the recommendations, the Home Affairs Bureau and Leisure and Cultural Services Department said: 'If Hong Kong is to host a similar sports event in the future, we will aim to provide the FC with accurate estimates of the total direct expenditures as far as practicable.'
But last night, the Home Affairs Bureau issued a statement saying of the HK$123 million approved subsidies, only HK$111.1 million was used.
The government earlier said the unexpectedly robust income for the games was the result of a conservative estimate and greater-than-expected support from community and commercial sponsors.
The government also admitted to a lack of experience in estimating the income from licensing and merchandising, television rights and ticket sales for major sports events. It said the event cost more than predicted because the number of volunteers increased to 6,000 from 3,000, while the scale, standard and quality of the opening and closing ceremonies grew larger with more sponsorship.
The audit also noted that only 22 per cent of an issued 44,974 guest admission tickets were used. Of 210,746 tickets publicly offered for sale, only 69 per cent were sold.