Consultants tasked with putting together a business case for the 2026 Commonwealth Games were unable to inspect any venues or speak to key stakeholders due to “strict confidentiality requirements” and a “very tight” deadline.
Representatives from consultancy firms Ernst & Young (EY), DHW Ludus and MI Associates on Tuesday told a Victorian upper house inquiry into the 2026 Commonwealth Games’ cancellation their business case, which estimated the event would cost $2.5bn to run, was largely based on “desktop research”.
Dean Yates, a partner at EY, told the inquiry his firm was engaged by the Department of Jobs, Precincts and Regions on 15 December 2021 and given six weeks to put together the business case for hosting the Games across several regional venues.
He said he approached DHW Ludus and MI Associates for their help, given the two consultancy firms had significant expertise in major event infrastructure.
The three firms, however, were unable to conduct any fieldwork as they put together the business case, Yates said.
“The highly confidential nature of this engagement meant that no fieldwork, such as formal inspection of the potential venues, could be undertaken by EY, DHW Ludus or MI Associates, nor could any consultation take place with any potential suppliers, partners or other departments,” he told the inquiry in his opening statement.
“As a result, the business case … was an early stage estimate of the potential cost and it was understood widely that these costings would need to be validated, tested and refined.”
Under questioning, Yates said it was not uncommon for consultants to be called in with little notice and under confidential circumstances. But he said there were a “significant number of limitations” concerning the Games’ business case.
“Time, consultation, the ability to visit venues – the scope that we were working against, it was very tightly defined by the department,” Yates said.
“Particularly, the confidentiality aspect of it basically led to a situation where a desktop research was all that we could do in the timeframe.”
He said if given more time the firms would have “spoken to more stakeholders, we would have visited a few venues”.
“I suppose summing it up, we would have been able to do more due diligence than that we were allowed to,” Yates said.
“The six weeks was quite limiting in what we could do.”
The business case informed the government’s decision in 2021 to bid to host the 2026 Games. Two years later, the government cancelled the event, with the former premier, Daniel Andrews, blaming cost estimates tripling to $7bn.
He went on to describe the business case as “hardly the greatest piece of work” but the three firms on Tuesday stood by their work.
Also appearing before the inquiry on Tuesday was the Department of Jobs, Industry and Regions secretary, Tim Ada.
Last week, Ada told another parliamentary inquiry that the head of Department of Premier and Cabinet, Jeremi Moule, advised him against telling his minister about the potential cancellation of the Games.
Ada said he was told by Moule that a senior member of the government would tell the minister for Commonwealth Games legacy, Harriet Shing, that lawyers were being called in to provide advice about withdrawing from the 2026 event.
On Tuesday, Ada said he believed it was reasonable not to disclose this information to Shing, noting under his employment contract he is subject to duties to “obey lawful and reasonable directions made by the premier”.
“I was not withholding information from the government. The government already had the confidential information,” he said.
“I did consider it a lawful and reasonable direction provided to me.”
Ada said he understood Shing would be told “around a similar time” he was informed about the potential cancellation. Ada learned about the cancellation being considered on 19 June while Shing previously testified she was informed on 22 June.
The opposition’s spokesperson for major events, Sam Groth, has asked Victoria’s public sector commissioner to investigate the two senior public servants’ conduct.
“Why did the head of the public service personally intervene to keep news of the pending cancellation of the Games quiet? Victorians deserve to know the truth,” Groth said.
Victoria paid $380m in compensation to Commonwealth Games bodies, who are now scrambling to find a host city after the Gold Coast also withdrew its bid on Sunday evening.
Athletics Australia’s president, Jane Fleming, told the inquiry the announcement by the Gold Coast meant “the opportunity of a home Games in 2026 or 2027 appears almost certainly lost”.
