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Economics

Cost overruns are endemic to mega-projects

Professor Bent Flyvbjerg took up his post as Chair of Major Programme Management at the Said Business School at Oxford University on April 1st 2009.

“In a landmark study, ....[he] analysed over 250 major transport infrastructure projects and found that 90% went over budget — and that the benefits averaged only half of those promised. This was so consistent that Flyvbjerg concluded it amounts to “strategic misrepresentation”, and that the culprits are politicians and bureaucrats competing for scarce public resources or seeking to get a suspect project off the ground to make political capital.“


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Winter Games Project Hits Snag in Vancouver

By Ian Austen, New York Times published: November 14, 2008

OTTAWA — When Montreal announced that it would be the host of the 1976 Summer Olympics, Mayor Jean Drapeau promised that the Games could “no more have a deficit than a man can have a baby.” Ultimately the Games left behind about $1.5 billion in unexpected debt that was paid off only two years ago.Now, Vancouver residents prepare to vote in a municipal election on Saturday, the freeze in credit markets and a collapse of the city’s real estate market have made the financing of the 2010 Winter Games a critical issue.


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What happened to the relocated businesses? LDA FOI response

According to the LDA the four Olympic Boroughs, Newham, Hackney, Tower Hamlets and Waltham Forest lost a total of 93 companies employing 1245 staff as a result of the relocation of businesses. A total of 209 businesses employing 4964 staff were relocated. 25 businesses closed completely with a loss of 65 jobs. A further 10 businesses employing 54 staff are not accounted for.


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Why Bush will stand with Hu Jintao at the opening of the Beijing Olympics

China's government, which invests up to a third of its $1.68 trillion in currency reserves in [US] Treasuries, is "not smart'' to invest in U.S. debt and should seek higher returns, a former legislator said [June 13 2008]. "I don't think it's a smart move to invest in U.S. bonds,'' said Cheng Siwei, former vice chairman of the National People's Congress, China's legislature, at a Beijing conference.


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A Construction Industry View

If greed is good, then the construction industry is a great place to be virtuous. The typical director takes home £400,000 a year more than he did in 1995, while employees’ wages have gone up nearly 75%. Indeed, the past decade or so has been extraordinarily kind to construction. Margins across the industry have more than doubled. Even contracting margins, which look so lowly when compared with the rest of British industry, have risen from an average of 0.8% to 2.4%.


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Delivering a usable local legacy

On 15th January leaders of the five London 'Host Boroughs' submitted a written memorandum to the House of Commons Select Committee for Culture, Media and Sport. This outlined their concerns about how well the ODA were likely to supply adequate design and financing to a sustainable social legacy for the people of those boroughs.


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Colorado the only state ever to turn down Winter Olympics after winning bid

With a brash young lawyer-lawmaker named Dick Lamm leading the way, residents said they didn't want the 1976 Winter Olympics. And they said it in a big way. The landmark vote on Nov. 7, 1972, wasn't even close -- 514,228 to 350,964. A 59.4 percent majority said they weren't willing to spend tax dollars to have the Games in their state.


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