By Clare Ogilvie
Both federal government and 2010 Olympic officials said a
recently ordered federal audit of venue planning to date for the Games is routine.
“It is a routine audit that we do over 100 times a year,” said
Canadian Heritage spokesman Len Westerberg.
“We want to make sure that the recipient is complying with the
terms and conditions that were part of the (2002 Multi-party) Agreement.”
The audit, which is focusing on venue spending, will cover from
fiscal year 2003-04 to 2006-07. It will also look for any areas which can be
“…That way we can make timely improvements,” said Westerberg.
“There is nothing sinister about this. Nothing precipitated it.
It was part of the agreements. It is part of our due diligence. We have to make
sure that the money being spent is being spent in the best interest of the
There will be other audits leading up to the 2010 Winter Olympics
and Paralympics in Whistler and Vancouver, which will run from Feb. 12 to 28
and March 12 through 21 respectively.
Said Mary Fraser, manager of communications for the 2010
Vancouver Organizing Committee: “This is a basic preliminary due diligence step
for an initiative of this magnitude, typical of the methodology employed by the
Department of Canadian Heritage for contribution recipients and is about
ensuring that funds provided through the contribution agreements were used for
the purpose intended and to make timely improvements to address any weaknesses
identified in the audit.
“…Heritage Canada annually conducts over 100 similar audits of
its funding recipients.”
Westerberg said the audit had nothing to do with a federal
review carried out earlier this year by the federal government as it considered
a request by VANOC for a further $55 million for venue construction.
The review, by Pacific Liaicon Associates Inc., was completed
last May. The report raised concerns over a number of issues, including the
fact that only three venues — the Nordic Centre, the UBC Ice Hockey
Arena, and the Whistler Sliding Centre — were close to completing their
“The rest of the venues are either in the conceptual diagram
stage of just starting detailed engineering, which means that there is not
enough information to develop a good estimate and a procurement plan,” states
the May 19, 2006 report.
“The procurement plan must be married with the estimate to
develop the Capital Cost budget.”
Each venue site is examined in the report showing both the bid
book cost and the new adjusted costs for the venues made public earlier this
year by VANOC.
Overall it estimates that VANOC needs about $2.6 million for
various costs, design and business planning consultants just to optimize venue
planning and designs.
The report applauds VANOC for getting an early start on the
Whistler Sliding Centre and the Nordic competition site in the hopes of getting
Canadian athletes training in those facilities before the Games.
However, it describes the Richmond Skating Oval as being in an
“extremely tight situation” because of the initial delays in the project, the
extended preload requirements, and the fact that design is falling behind.
In some cases, according to the report, capital cost estimate
overruns due to escalation have necessitated redesign.
It also called for a restructuring of the project and
construction management team. Coincidentally, within days of the release of the
report VANOC hired a new construction boss, Dan Doyle.
In conclusion the report states: “In terms of the request for
additional funding of $55 million each from the Federal Government and the
Government of British Columbia, we have concluded that given the present
approach, VANOC will have difficulty in being able to deliver a minimally
acceptable (to the International Olympic Committee) package of Olympic venues
within the additional capital budget funding requested.”
It then goes on to offer how some of this concern could be
“Whether the revised enhanced ($580 million) budget will be
sufficient to deliver a venue package that meets IOC satisfaction is
In making that statement the report outlines escalations at a
couple of the venue sites. For example at bid time in 2002 the sliding centre
was projected to cost $55 million. By July 2005 that had gone up to $68.9
million. In December 2005 it was at $80.4 million and now it is estimated to
cost $99.9 million.
The reports goes on to outline the challenge of finding trades
to work on the Whistler venues, which could add to their eventual costs,
because of lack of affordable housing.
“Even with the attraction of premium hours (understand the
contractors are now working 60 hours) the high cost of accommodation could be a
deterrent to hiring for all the Olympic and related projects once they are
However, since much of the work is done in the summer VANOC
believes housing can be looked after with the help of those who provide
employee housing such as Whistler-Blackcomb.
The report made several recommendations including:
• the federal government give VANOC the $55 million
• to confirm with VANOC by Dec. 1 that $580 million is enough
• to build the Hillcrest Curling Rink within the $28 million
plus reasonable escalation or cancel the project and move curling to another
“Regardless of the recommendations noted being implemented and
regardless of any success they may have in building up their in-budget
contingency, with only $13 million in contingency left at his time and with
very little construction started except for the outside Whistler venues, unless
VANOC can, under the IOC rules, divert part of their $2 billion operating
budget to cover capital cost overruns including escalations, the Government of
Canada may be facing an additional funding request before completion of the
venues,” states the report.
Since that report was made public, amid a flurry of other
reports on the 2010 Games last month, Olympic officials have repeatedly said
that they are committed to bringing the Games in on time and on budget.
Said John Furlong, CEO of VANOC, at the time; “I believe it is going extremely well and our team is just driven to move that project where it needs to be to come in under budget. That is our objective and that is what we are going to do.”