Going for gold: Olympic bid sets the tone for infrastructure development in Istanbul

The Olympics have often served as international coming-out parties for host nations with emerging economies. Games held in Japan (1964), South Korea (1988) and China (2008) showed that hosting the Olympics and Paralympics can help establish or redefine a country’s global status. Having applied for Istanbul to host the 2020 Summer Games, and becoming a candidate, Turkey has similar aspirations.

“Although Turkey has previously submitted four unsuccessful bids to the International Olympic Committee (IOC), this time is different,” Levent Egeli, secretary-general of the Turkish Tourism Investors Association (TYD), told OBG. “In the last decade Turkey has emerged as a global leader and regained its historical role as a bridge between cultures, putting the country in a perfect position to represent the values and interests of the Olympic movement,” he added.

The Vision

For Turkey, which is competing with Japan (Tokyo) and Spain (Madrid) to host the 2020 Summer Olympics and Paralympics, presenting a competitive vision to the IOC is essential. Having largely recovered from the 2011 tsunami and nuclear disaster, Japan has said that its hosting of the Games would promote the principles of resilience and revitalisation. Still suffering from a severe financial crisis, Spain has argued that hosting the event would help the nation to stimulate its beleaguered economy.

Turkey’s bid, which will be determined in September 2013 when the IOC announces the winning city, is based on three fundamentals: for a start, this would represent the first opportunity for a majority-Muslim country to host the Games; second, Istanbul is an attractive venue for the event given the city’s status as a major world tourism destination; third, unlike Spain and Japan, Turkey has a high-performing economy, which would facilitate planning and execution.

“Our economy is giving us a lot of strength,” Hasan Arat, Istanbul 2020 Bid Committee chairman, told local press. “If you do not have a strong economy, you cannot handle this operation; it is impossible,” he said.

The Plan

The Games Master Plan formulated by the Turkish government divides Istanbul into four areas of activity: the western Olympic City Zone, containing 14 sporting venues: the Coastal Zone with seven venues along the Marmara shoreline; the Bosphorus Zone with a total of eight venues (on both sides of the strait), and the northern Forest Zone with four venues. Each of these zones will be linked by a Games Route Network (GRN) that will rely heavily on the public transit network.

According to Istanbul 2020 planning documents, the GRN will ensure journey times between venues of no more than 35 minutes – a claim generating scepticism given that Istanbul has a number of congested urban areas. Indeed, Turkey’s previous bids failed partly because the IOC deemed that the city’s transport infrastructure could not handle a sudden influx of visitors for the Games.

Nonetheless, Istanbul’s transport network is rapidly expanding. Under the city’s 2009-23 Integrated Urban Transport Master Plan (IUAP), upgrades to the public transit system have been prioritised, as reflected by the completion in 2012 of the M3 and M4 metro lines, the latter of which marked the largest subway investment in Turkey’s history. According to government records, Games-related transport spending under the IUAP will ultimately total $9.8bn (€7.61bn).

These investments would reduce the likelihood of congestion during the Games, especially if combined with other transport projects planned for Istanbul in the coming years. These include a third Bosphorus bridge, with an estimated construction cost of $2.4bn (€1.86bn), the Eurasia Tunnel with a price tag of some $1.2bn (€932m), and the Marmaray Project due to cost $4bn (€3.11bn). Moreover, Istanbul also benefits from the global reach of the flag carrier Turkish Airlines (THY), and has two international airports in Atatürk Airport and Sabiha Gökçen Airport, which have a combined annual capacity of more than 60m passengers. By 2017, these facilities will be accompanied by a third city airport at a cost of $9.3bn (€7.22bn) that will rank among the world’s largest.

Benefits

If Istanbul were awarded the Games, urban planners would have a compelling reason to further expedite infrastructure development, which is also needed to address rapid population growth. The government statistical institute, Turkstat, projects that by 2023 Istanbul’s population will reach 16.5m (up from 13.5m in 2011), a conservative estimate given the city’s large number of unregistered inhabitants.

Another possible benefit, particularly with respect to Paralympics is the impetus it might provide to socially inclusive public policies. Approximately 1.7m residents of Istanbul are physically impaired; however, not all services in the city are accessible for disabled people. Moreover, current legislation at the national level is not aligned with the UN Convention on the Rights of Persons with Disabilities.

Domestic participation in sports could also receive a boost if Istanbul is awarded the Games. In turn, this could improve public health outcomes, foster social cohesion and stimulate youth engagement in extracurricular activities. Moreover, the bid for the Sumer Games could facilitate the implementation of Turkey’s $1.7bn (€1.32bn) National Sports Plan, which has called for the construction of 24 new stadiums and 415 athletic facilities by 2014.

Perhaps most importantly, the Olympics has the potential to provide Istanbul and, indeed, the entire country with substantial economic returns. For starters, government officials have argued that planning and hosting the event would lead to the creation of about 200,000 new jobs, many of which would be made available to the youth, who face relatively high unemployment rates. Moreover, holding the Games in Istanbul would not only provide attractive advertising opportunities to major foreign companies such as Coca-Cola, Visa and Panasonic, but also to Turkish firms seeking to promote their brands before a global audience. As of mid-2013, seven local companies had sponsored Istanbul’s bid: Digitürk, Doğuş Group, Koç Holding, SabancıHolding, Türkcell and THY. According to local reports, these firms had agreed to contribute a total of $20m (€15.5m).

What is more, hosting the Games could help the government to achieve many of the national development objectives set forth under Vision 2023, which aims for Turkey to become one of the world’s 10 largest economies by its centennial. A key pillar of this strategy is the tourism sector – one of the industries said to benefit most directly from the event. According to market impact assessments, in the years when Sydney (2000), Athens (2004) and Beijing (2008) hosted the Olympics, the contribution of tourism to GDP rose by 18.3%, 12% and 6.4%, respectively.

Concerns

Yet, examples from other countries also suggest causes for concern. For instance, not all analysts agree that the Games have a positive impact on host city or host country tourism. A 2006 report from the European Tour Operators Association (ETOA), for example, highlighted that there is “little evidence of any benefit to tourism of hosting an Olympic Games, and considerable evidence of damage.” To support this assessment, the ETOA noted that hotel occupancy rates actually declined for Atlanta (1996) and Sydney in the years when those cities hosted the Olympics. In addition, other researchers have found that Beijing experienced a 39% drop in hotel occupancy rates when it hosted the Games in August 2008 compared to the same month in 2007.

Another issue is cost overruns. According to researchers at Oxford University, every Olympics since 1960 has exceeded its original budget. This should be especially disconcerting for Games planners in Istanbul, who project that hosting the event will cost the city around $19.2bn (€14.91bn) in infrastructure spending, well above the expenditure needed for Tokyo ($4.9bn [€3.81bn]) and Madrid ($1.9bn [€1.48bn]). Further, examples from host cities such as Athens suggest that many of the expensive facilities developed to host the Games may not serve a useful purpose for the city after the event.

Intangible Rewards

These challenges are not lost on the Turkish government, which seems intent on learning lessons from the experiences of previous host countries. In the first few months of 2013, Games planners from Turkey held high-level meetings with officials from the UK and Greece to discuss everything from navigating the bid process to managing event operations. Given the longstanding political challenges between Turkey and Greece, the meeting between those countries (which led to a formal Olympics cooperation agreement) carried extra weight, and symbolised to many the power of the Games to bridge barriers. Indeed, though the costs and benefits of hosting the Olympics are somewhat unclear, most agree that Turkey would reap intangible rewards, including an increase in cultural and political influence globally. Having emerged as one of the world’s leading economies in recent years, Turkey is now building strong platforms to enhance its soft power potential.