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GRC Professional : GRC Autumn 2012
28 GRC Professional • Autumn 2012 CASE STUDY The risk Games What are the top risk management issues of the 2012 London Olympics? thE olyMPiC GaMEs is a modern wonder of project management, with more than 14,000 athletes from over 200 nations competing in front of 10 million ticketholders and a media scrum of 22,000. the olympic delivery authority (oda) has a £7.2 billion budget to ensure the infrastructure and systems are ready and operational in time for immovable deadlines. With this scale and complexity comes an array of risks that need to be managed and monitored. dr Will jennings, research associate at the Centre for analysis of risk a nd reg ul ation at the london school of Econom ics, whose book olympic risks will be published by Palgrave Macm illan in june 2012, says the risks are broadly comparable to recent olympics and extend beyond the activities of the oda. the threat of terrorism has been a major concern for organisers since 9/11 and was first recognised after the Munich massacre in 1972, while environmental hazards to public health from air pollution were highlighted ahead of the athens and Beijing olympics. there is also the risk of strike action as there was in the lead-up to Montreal in 1976 and athens in 2004. “organisers face considerable financial risks due to the difficulties of managing costs (the average cost over-r un for olympic budgets since the 1970s is around 200%) and uncertainties over revenues,” dr jennings continues. “What has changed in recent times is there is a willingness of olympic-related organisations to assess and manage risks to their oper ation s.” however, he believes that the g reatest single risk that london 2012 faces is the possibility for carefully-planned systems to be overwhelmed by some unexpected event or chain of events. “the contagion and unmanageability of the riots in 2011 demonstrated how police resources in other parts of the uK were weakened due to the concentration of policing in london,” he says. “Civil emergencies such as flooding or a fuel strike could put a substantial strain on emergency services and the armed forces at a time when the olympics are already putting exceptional pressure on public ser vices.” london 2012 has already demonstrated how some typical risks that face major projects can best be handled, while other challenges remain for organisations operating during the olympics. Continued page 29 The true price of the London Olympics London’s Olympic budget of £9.3 billion is likely to be exceeded and more public funds required, according totheHouse ofCommons’ public accounts committee. “T he Funding Package of £9.3 billion allocated to the Olympics does not cover the totality of the costs tothe public purse of delivering theGames ... which are already heading for around £11 billion,” an official statement revealed. The announcement comes as Britain plunges into the first double-dip recession since 1975, and endures its longest economic slump for a century.ACIManaging Director Martin Tolar believes a huge budget blowout from the Games presents serious riskstotheBritish economy. “Theimpactofacost blowout could severely impact the country’s economic recovery, with the financial gains of hosting an Olympics (such as increased tourism) outweighed by the need to raise more public debt, which hasbecome more expensivepostGFC, or cut other public services to ensure longer term budget targets are still met.” Civil emergencies such as flooding or a fuel strike could put a substantial strain on emergency services and the armed forces at a time when the Olympics are already putting exceptional pressure on public services.
GRC Summer 2012
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