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Consultants had just days to budget for four sports the Andrews government added to the now-cancelled Commonwealth Games lineup at the eleventh hour, as part of a business case that fatally underestimated the investment needed from the state.
Three other sports still had no proposed venues when DHW Ludus assessed facilities for lead consultants Ernst & Young on behalf of the Victorian government in January 2022, hundreds of pages of documents published late on Friday show.
Premier Daniel Andrews and Treasurer Tim Pallas announcing the $380 million compensation deal to cancel the Commonwealth Games.Credit: Chris Hopkins
Premier Daniel Andrews and Deputy Premier Jacinta Allan, the then-minister for Commonwealth Games delivery, in July suddenly aborted the 2026 event scheduled for five regional hubs because the cost had escalated from $2.6 billion to up to $7 billion.
The initial business case, which informed the government’s decision to bid for the Games but which warned the event may fail to produce an overall benefit, was released last month when Victoria reached a $380 million settlement with organisers.
Key documents remained unpublished to allow the government to redact sensitive details until late on Friday afternoon, when hundreds of pages of appendices went online.
The appendices show that DHW Ludus had seven days to conduct detailed analysis of facilities for three sports, and two weeks to analyse a fourth, after the government added them to the agenda for the steering committee’s approval while the confidential document was in its final days.
DHW Ludus has two staff members, according to the firm’s website.
Weightlifting was tacked onto the Commonwealth Games agenda in December 2021 and approved by the steering committee on January 6, 2022. The committee then adopted government additions of basketball, BMX and cross-country mountain biking on January 13.
The “facilities assessment” was submitted seven days later, on January 20 last year.
Associate Professor Abdel Halabi, an accounting expert from Federation University based in Gippsland, said that the narrow timeline would not have given consultants a proper opportunity to analyse the evidence.
“I would think that one or two weeks is certainly not enough time to cost a sport … this should have been months in the planning,” said Halabi, who specialises in sports accounting.
“Getting the evidence to actually bid for the Games seems to have been a very, very short process.”
BMX, which was going to make its Commonwealth Games debut, was planned in the documents for Ballarat but was ultimately announced for Shepparton instead. When contacted on Tuesday, BMX Ballarat said it was not privy to any conversations about the Games.
While weightlifting was assessed with seven days’ notice for the Geelong Convention Centre, it was announced for the nearby Waurn Ponds instead. Basketball was planned for Bendigo Stadium but was announced for a local pop-up venue, while cross-country mountain biking was initially going to be held in Buninyong in Ballarat but was later confirmed for the nearby Creswick Trails.
Accounting Professor Ian Gow, who is director of the University of Melbourne’s Centre for Corporate Governance and Regulation, said he expected early planning documents would be subject to shifting locations.
“I would say that one to two weeks is not enough time to develop a detailed budget that would be used for running the whole project,” Gow said. “But it is probably enough time for a team with deep expertise and experience in the area working long hours to come up with a rough estimate of total costs.”
The full business case was finalised after the facility assessment was submitted.
The January 2022 workings were done with no venue identified for squash, beach volleyball and BMX freestyle, but assumed that pop-up venues could be found.
The steering committee only identified potential venues for several other sports the week before the facility assessment was submitted.
DHW Ludas warned in its report that its calculations may have been different if it was not restricted by confidentiality.
“Access to more detailed information, or technical expertise … or consultations with relevant stakeholders such as venue owners and/or managers and sports, along with site visits/inspections may have resulted in conclusions that differ from those provided in the report,” the business case said.
EY partner Dean Yates, speaking at a Senate inquiry hearing last week, said he was comfortable with the accuracy of the estimates provided given the limitations.
Sale yards in Ballarat that were to be converted into accommodation for Commonwealth Games athletes.Credit: Jason South
A government spokeswoman said additional sports were selected by mutual agreement between the government, Commonwealth Games Federation and Commonwealth Games Australia.
It was “based on the universality of the sport across participating nations, access to suitable venues in regional Victoria, economic impact and legacy benefits”.
“We have made public the revised costings which drove our decision to deliver a comprehensive $2 billion package to ensure regional Victoria still receives the housing, tourism and sporting infrastructure benefits that would have been facilitated by the Games – and more,” she said.
DHW Ludas declined to comment.
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