Expert View: Urban regeneration - that's the real Olympic ideal

No business pitch I can think of has equalled the extraordinary events of last week when the International Olympic Committee's evaluators came to town to assess London's 2012 bid. That they were serenaded by the London Philharmonic, wined and dined by the Queen and gladhanded by the Prime Minister indicates just how seriously the UK is taking this bid. What is all the fuss about?

No business pitch I can think of has equalled the extraordinary events of last week when the International Olympic Committee's evaluators came to town to assess London's 2012 bid. That they were serenaded by the London Philharmonic, wined and dined by the Queen and gladhanded by the Prime Minister indicates just how seriously the UK is taking this bid. What is all the fuss about?

The money on the table is considerable. Some £2.4bn of public and lottery money is on offer to create an Olympic park and various sporting facilities elsewhere. An additional £1.45bn will be spent on the Olympic village and the infrastructure of the Lea Valley. And the colossal £17bn earmarked to improve London's transport links suddenly seemed more secure.

To see whether these vast sums are justified, we must examine the "Olympian legacy" carefully. Leaving aside the political effects, or changes in the nation's sporting habits, Lord Coe and his gallant bidders have made a straightforward attempt to talk up the business benefits.

The Government took over the Queen Elizabeth II conference centre in Westminster in January to convince business leaders of the case. Culture Secretary Tessa Jowell claimed 7,000 jobs would be created in the construction of the Olympic facilities and a further 12,000 as part of the "legacy". It was observed that, in Sydney, one million items of sports equipment were supplied, 12 million meals served, 500,000 items of clothing made etc.

The effort has met with some success - witness the distinguished executives who put their names to a letter to the Financial Times last week. Bigwigs such as Lord Sheppard, Sir Win Bischoff and Sir Stuart Hampson made an impassioned plea that the London bid offers "a once in a lifetime opportunity". Indeed, the bid has some big-hitting business sponsors, led by BT, British Airways, Virgin Atlantic, EDF and Accenture. Mind you, the last two's patronage does seem quite widespread: EDF is also backing Paris, and Accenture is supporting Paris, New York and Madrid.

Some extravagant claims are being made about what has happened to previous host cities. On the plus side, Atlanta argues that the 1996 games brought it an extra £3bn in tourism; Sydney claims its Olympics generated an extra £4bn, and even estimates that over £1bn in contracts will be awarded by the next host, Beijing, to Australian companies that have demonstrated their expertise.

The experience of Athens is less encouraging. On the cost side, the estimated bill went from £3.14bn to £6.29bn when the games opened. Some think the final bill will be closer to £8bn. This dwarfs the tourist benefits, unless they prove sustainable. Sadly, a recent letter from the Athens hoteliers union, EXA, admitted that despite the massive investment made by its members in their hotels, occupancy had dipped and the city had not moved up even one place in the European league table.

Problems afterwards are not the only issue. New York is in a pickle over attempts to use the bid to regenerate run-down areas. The problem is that many of the proposed Olympic sites are not yet in public hands. One Brooklyn landlord, Menachem Friedfertig, owns a property where the Olympic scoreboard will be. He is awaiting offers.

This case gives a clue to what is really going on. Urban regeneration projects cannot get the support they need without the razzmatazz. The Olympic project will do many good things: regenerate the Lea Valley, create a 124 acre "Hyde Park of the East", and leave 3,600 apartments offering low-cost accommodation.

It's just a pity we need the excuse of a good sporting knees-up to do all this.

christopher.walker@tiscali.co.uk