Shanghai left with 19b yuan bill after Expo
World Expo 2010 left Shanghai almost 19 billion yuan (HK$23.03 billion) out of pocket once construction costs are included, and organisers used nearly 13 billion yuan in bonds and loans to pay for it, an official audit report has revealed.
Although the six-month mega fair made a 1.05 billion yuan operating profit, that was eclipsed by the 19.7 billion yuan cost of building the site.
The expo, which ran from May to November last year, drew 73 million visitors, the highest number in the event's 160-year history. The Shanghai government hailed it as a major success, but there have been lingering doubts about its massive cost.
The report, released by the Shanghai municipal audit bureau on Friday, showed the expo cost 31.7 billion yuan to build and run - 3.1 billion yuan more than its original budget.
Ticket sales were the event's main source of revenue, accounting for 7.36 billion yuan of the total 13 billion yuan in income. A further 3.97 billion yuan from sponsorship and advertising was the next biggest contributor, followed by 674 million yuan in franchising agreements.
The figures confirm the extent to which visitor numbers were driven by discounted and free tickets. Ticket sales work out at an average of just over 100 yuan per visitor, the price of a concessionary ticket. Standard tickets ranged from 200 yuan for full-price entry on specific days to 90 yuan for late entry in the evening. Even seven-day tickets cost 900 yuan, an average of 129 yuan per entry.
The municipal government handed out at least 10 million tickets - one for every Shanghai household - just before the opening of the event, and it is widely understood that more free or discounted tickets were channelled via state-owned enterprises.
It was also openly rumoured among staff at national pavilions that the official gate numbers were inflated, although this was denied by expo organisers. The audit report does not mention such factors. It does, however, show the lengths that expo organisers went to attract attention to the event following lacklustre visitor numbers in its opening month.
The report says the original estimate for operating costs - 10.6 billion yuan - was 'insufficiently detailed' and had to be revised at an unspecified date. The new figure put costs at just over 12 billion yuan. This revision was likely made in June, when organisers increased the number of live performances and staffing levels and had a marketing drive in neighbouring provinces to boost attendance.
Shanghai Mayor Han Zheng said in August last year this would likely push costs over budget.
Although the audit report said it found no severe cases of misappropriation, it did censure organisers on a number of issues - principally for failing to estimate operating costs in sufficient detail or revise budgets in a timely manner. However, construction costs were by far and away the main outlay, coming in at 19.7 billion yuan - 1.7 billion yuan over budget.
The audit report said the greater costs were due to strong inflation in wages and construction materials over the 3 1/2 years it took to complete the 47 projects, coupled with a number of countries backing out of building their own pavilions and switching to using rented facilities built by the organisers. These costs were paid with 2.66 billion yuan from the Shanghai government's coffers, 2.86 billion yuan in commercial and social donations, 1.2 billion yuan from a dedicated cultural fund, and the sale of 5.5 billion yuan in expo bonds. The remaining 7.5 billion yuan was raised through loans from banks and capital funds and 'other methods'.
The report says that bills for the construction have been 'basically' settled or are in the process of being settled, but it does not state the repayment terms or period. The audit is restricted to the 5.28 square kilometre expo park. It does not take into account the massive investment made in the city's transport and other infrastructure in the eight-year run-up to the expo - which some estimates put at 400 billion yuan.
Shanghai spent this much, in US dollars, on infrastructure such as the metro rail network in the two years before the six-month expo