Malaysia is being offered £100 million pounds to host the 2026 Commonwealth Games. That looks like a jackpot given on a silver platter. Even the Taylor Swift’s just concluded exclusive concert in Singapore in the Southeast Asian leg of her Eras Tour looked lame compared to this international sports event involving 74 Commonwealth nations and territories.
If the Taylormania’s six-day performance, which saw more than 300,000 fans from across the Southeast Asia made their way to Singapore, could contribute S$500 million economic benefits to the tiny island, what more the Commonwealth Games? And Malaysia is already looking at the mouth-watering incentive of almost RM600 million before anything needs to be done.
But there’s no such thing as a free lunch. Before the government of Anwar Ibrahim hastily accepts the offer, it should understand why the Commonwealth Games Federation (CGF) generously offer the money. The £100 million of “financial and strategic support” was an offer to any potential host as part of the Australia withdrawal settlement. That means the Aussie was no longer interested.
The Australian state of Victoria decided last July to withdraw as the host of the 2026 Commonwealth Games due to rising costs. The event, scheduled for March 17-29, 2026, saw the hosting costs skyrocketing from the initial projection of A$2.6 billion (about RM8 billion) to A$7 billion (RM21.8 billion). In fact, Victoria’s government agreed to pay A$380 million for breach of contract.
If indeed the international multi-sport event is so profitable in the first place, or at least could generate a bigger economic impact than Taylor Swift’s concert, it doesn’t make sense for Victoria to cancel it. Within hours of Victoria’s announcement, the neighbouring state of New South Wales – whose state capital Sydney hosted the 2000 Olympic Games – said it would not take over.
The best part was when other Australian states, with the exception of Queensland, poured cold water on hosting the event too. At a very conservative estimate, an Australian independent financial analysis determined the event would cost US$3.5 billion (£2.75 billion; RM16.5 billion), with the economic benefit only amounting to US$1.2 billion (£1 billion; RM5.6 billion).
In short, all analysis agreed that the Commonwealth Games would cost a significant amount of money and provide very little return on that investment. Agreed with Victoria Premier Daniel Andrews to pull out of the event, Western Australian Premier Roger Cook said – “The Commonwealth Games aren’t what they used to be and as a result of that they don’t provide the return on investment”.
The fact that Victoria was more than happy to cut loss and pay compensation to the tune of A$380 (RM1.2 billion) should provide enough reasons for Malaysia to also avoid the games like a plague. However, don’t underestimate this Southeast Asia country’s stupidity. After all, this is the same nation dumb enough to import radioactive waste from Australia when the Aussie did not want the toxic materials in its backyard.
Already, clueless Mohamad Norza Zakaria, president of the Olympic Council of Malaysia and the Commonwealth Games Association of Malaysia, was incredibly excited about the prospect of hosting the game that Australia rejects. He said – “With the existing world-class facilities, Malaysia is well-equipped to host an international event of Commonwealth magnitude”.
The incompetent Mohamad Norza brags- “The hosting will involve minimal Government spending and bring significant socio-economic benefits to the country. It will also elevate the standard of Malaysia sports much like the way it did in the aftermath of the 1998 Games. To this end, the CGF and CGA Malaysia have offered an attractive proposal to the Government of Malaysia.”
Exactly what type of world-class facilities that he was referring to after more than 25 years since Malaysia last hosted the Commonwealth Games in 1998? It’s just 18 years since Melbourne, Victoria last hosted the 2006 Commonwealth Games, where Queen Elizabeth opened the event for the first time on Australian soil. Yet, Victoria still needed to spend up to A$7 billion (RM21.8 billion) for the 2026 games.
Malaysia is well known for its “first class infrastructure, third world mentality”, contributing to poor maintenance of new facilities. If even Australia had to face an escalation of costs, what more Malaysia, a country infamous for not only cost overrun in every single project, but also has the tendency of at least tripling the initial costs due to massive corruption?
At best, Malaysia may need to spend between US$3.5 billion (RM16.5 billion) and A$7 billion (RM21.8 billion). At worst, Anwar administration could see the cost of hosting the 2026 Commonwealth Games balloon to A$21 billion (RM64.8 billion) as a result of corruption. It’s not like you just need to spend some money on minor renovation or repair works or printing marketing banners.
Ask yourself this question – why did not other Commonwealth countries such as Canada, England, New Zealand, Scotland, Wales or India quickly grab the opportunity abandoned by Australia? The primary reason Malaysia is being approached is because the Commonwealth Games Federation (CGF) could smell a sucker from miles away. The biggest problem is not merely the ROI (return on investment) alone.
With two years left before the games, Malaysia will certainly look like a bunch of clowns if it fails to upgrade the venue, getting sponsorship, providing infrastructure and whatnot. All eyes will be on this magnificent nation that foolishly and arrogantly thought it could do the job, only to be stripped of the rights to host after failing to meet promises, just like what happened to South Africa in 2015.
In 2015, the South African city of Durban was awarded the 2022 Games after the Canadian city of Edmonton withdrew, also citing cost concerns. But 2 years later, like Australia, South Africa’s sports minister threw in the towel and revealed the financial burden – “We gave it our best shot but we can’t go beyond. If the country says we don’t have this money, we can’t.”
To save the 2022 Games, Birmingham and the British government stepped in, pumping more than £560 million, in addition to another £190 million from the local council of the West Midlands city. Originally, Birmingham had been scheduled to host the 2026 Games, but the decision to bail out South Africa’s failure saw Victoria getting the job instead, which is now vacant again after Australia withdrew. Subsequently, the Birmingham city council went bankrupt.
Actually, Victoria was named the host of the 2026 Commonwealth Games in 2022 after Kuala Lumpur, Cardiff, Calgary, Edmonton and Adelaide all pulled out from proposed bids because they were concerned about costs. Hence, should Prime Minister Anwar Ibrahim decide to step in to bail out Victoria, he has to explain and justify the financial feasibility of such project.
Essentially, the debts of the British Empire Games will become a political baggage – even a scandal – that would engulf Anwar’s political career at a time when the country is struggling with the high cost of living and global economic uncertainties, not to mention the RM1.5 trillion national debts. Worse, unlike Olympic Games, the colonial origins of the Commonwealth Games have seen it losing its relevance and audiences.
Crucially, if Kuala Lumpur fails to deliver the 2026 Games as promised, which it will certainly do, the opposition parties will capitalize on the issue to hammer Anwar’s leadership and question his competency. With the next 16th General Election must be held by 2027, the risk is too high for Anwar-led Pakatan Harapan coalition to toy with the games. Even India had no interest to host it.
Alternatively, to reduce the costs and risks, Malaysia and Singapore could consider jointly host the games. However, Singapore appears not interested as it will only continue to pursue sporting events that are aligned to its “strategic interests”, and Commonwealth Games isn’t one of them. Unlike Malaysia, financial considerations were crucial to any decision-making process in Singapore, even though it has the money to splash.
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March 16th, 2024 by financetwitter
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