Robert Gruman
PwC Russia Advisory Leader
What do the BRIC countries have in common? Besides being countries with dynamic emerging economies, Brazil, Russia, India and China have also been entrusted with the right to host recent or upcoming sports mega-events, including the Olympic and Paralympic Games, the World University Games, the Commonwealth Games and the FIFA World Cup.
This is no coincidence.
The hosting of a sports mega-event is a strong signal of the emergence of a country onto the world stage. The Beijing 2008 Olympic summer games are often described as China's "coming out party," its "emergence onto the world stage."
Host countries must also consider the very tangible legacy that can be achieved — one that is founded on the infrastructure built to stage a successful sports mega-event. The transformative effect of well-thought-out supporting infrastructure for a mega-event like the Olympics or World Cup has long-lasting economic, demographic and social implications for the entire region. How a government body — national, regional, or municipal — plans for the legacy of supporting infrastructure can have a ripple effect on the development of a region for decades to come.
Studies have shown that investment in mega-event-related infrastructure can accelerate economic development by as much as three decades.
This is the promise. But there are risks as well.
Inadequate infrastructure planning or follow-through might well upend the perception of impressive achievement: Reports documenting the potential lack of adequate infrastructure have sometimes dominated the news in the weeks and months leading up to a mega-event. Those reports have the potential to jeopardize the positive image a city or country is aiming to build. To avoid such a scenario, advance planning is essential. So is the importance of demonstrating the lasting benefit of that infrastructure investment, a true legacy for the community.
Ideas abound for how best to achieve this. But translating those ideas into reality is more elusive. How does the vision for infrastructure investment correspond to the region's long-term development objectives? Which financing models best apply in each case? What role does sustainability play? What are the projected maintenance costs? How will procurement occur? What kind of oversight should govern the process?
PwC understands each of these critical success factors and barriers. In a recently completed PwC Thought Leadership report on mega-event infrastructure opportunities, we analyze the infrastructure investments that a sample of host cities has made as well as the long-term implications for each region where those investments occurred. Among the lessons learned:
- Supporting infrastructure works best when it is part of the region's long-term plan for growth.
- A holistic approach translates vision into reality: Well-thought-out project definition objectives, transparent control and accountability, structured project oversight, a clearly defined timeline and robust communication and reporting help ensure successful completion of these large-scale infrastructure projects.
- Legacy planning for stadiums, especially large venues, is crucial.
- Public-private partnerships offer additional financing options, specialized expertise and risk transfer.
- Public-sector commitment to long-term partnerships is essential.
- Collaboration among various levels of government — federal, state and local — is essential to mega-event infrastructure planning and investment.
Russia's success in being entrusted to host a number of upcoming sports mega-events — including the XXVII World Summer Universiade 2013 in Kazan, the XXII Winter Olympic Games and XI Paralympic Winter Games in Sochi in 2014, and the FIFA World Cup in 2018 — is a testament to how far this country has come in recent years. In addition to being modern Russia's chance to showcase itself to the world, the coming years present a real opportunity for the country to achieve a larger legacy of socioeconomic development through modernization of its infrastructure.
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