London can profit from Games by following Sydney's example

The Secretary of State for the Department of Culture, Media and Sport stood at the window on the top floor of one of Barcelona's tallest hotels recently. Gazing out over the city, she asked the hotel manager what the Catalan capital had been like before it got the 1992 Olympics. "It was a dump,'' the manager replied. "The Olympics changed everything.''

The reply seemed to register with Tessa Jowell, who gave the idea of a London bid for the 2012 Games a favourable nod this week before travelling to Beijing, where she was due to survey the preparations now underway for hosting the Olympics of 2008.

From the point of view of the Minister's escort around Barcelona, David Luckes, the manager's reply could hardly have been more perfect if he had paid money for it. He didn't, of course. Although under old International Olympic Committee rules he would have probably been able to.

The Government is currently digesting vast amounts of research into a possible 2012 London bid – Luckes put together a feasibility study for the British Olympic Association and 10 days ago an independent cost-benefit analysis was also published. For now there is nothing much to be done by the BOA other than to lobby and cross their fingers.

Simon Clegg, the BOA's chief executive, believes the next eight weeks will be "absolutely critical'' for London's chances. He knows too, that whether the BOA likes it or not the issues that will concern the Government before they reach their decision in January will have less to do with sport than economics.

Luckes has described the current situation graphically. "The BOA and the Great London Authority are standing on the cliff top holding hands,'' he said. "We are waiting for the Government to join us before we jump off.''

While the image may not be a wholly comforting one, it encapsulates a basic truth. For the Olympics to return to London after a 64-year gap, it will require a leap of faith from Mr Blair and his Ministers.

This week, in an environment redolent of past enterprise – the East India Club – the BOA turned for illumination to a tall, powerful man who prompted his own government to access both funding and imagination in order to bring the 2000 Games to Sydney.

Rod McGeoch, the chief executive of the Sydney bidding committee, advocates the kind of approach to the task in hand that you might expect from a man who has played 300 games of first-grade rugby. McGeoch, who also dropped in to share some of his expertise with the DCMS this week ran the metaphorical ball from the off, charging straight for what he described as "the Montreal myth'' – a reference to the ruinous legacy of the 1976 Olympics still being paid for by the taxpayers of that Canadian city.

"Let's get that myth behind us,'' he said, as the assembled members of the BOA thrilled quietly around him. "The mayor of that city built a new airport and highway system, and then sent the bill to the organising committee.

"If you build a facility that's going to last 50 or 60 years, please only charge the Olympic budget for the appropriate amount. Montreal's taxpayers are still paying, but they are paying for public infrastructure.''

The public of Barcelona were better served 16 years later, McGeoch believes, because their mayor made it clear that he was taking the opportunity to create one of the great cities of Europe. "They said: 'We don't expect the Olympics to pay for it, but we are going to use the Games as a means of changing the city','' he said. Sydney's own bid, McGeoch added, had resulted in an overall profit of A330m dollars [£118m]. "Our Government was never in debt in any sense whatsoever,'' he maintained. "It easily absorbed the cost. There isn't any doubt any more that to run a successful Games financially is quite a modest challenge. Our stadium, swimming pool and main indoor arena were all paid for by private funding.''

As for the question of whether Britain could follow the lead set by Sydney in this respect, McGeoch was bullish. "I would have thought quite easily. You will absorb all the costs and it will give an enormous uplift to the whole country, not just to Londoners. I can assure you that that was so in our country.''

So that's sorted then. It's a no-brainer.

It would be wrong to imply, however, that such success would come without a human cost. McGeoch warned that anyone considering playing his role in a London bid would be committing themselves to three years of 24-7 dedication.

"It's a tough job,'' said McGeoch, who admitted that he had developed stress eczema on the back of his hands during the last year of his task. "I didn't realise what it was, but the day we won the Games it disappeared.''