Korea Olympics sparks million-dollar developments
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After being awarded the 2018 Winter Olympics, South Korea is pushing ahead with an US$8.4 billion development plan. On the government’s ‘to-do’ list is a new high-speed rail network and a winter sports complex.
Organisers will spend US$3.7 billion on a high-speed rail service linking the central city of Wonju to host cities Pyeongchang and Gangneung in the east. Meanwhile, six athletics tracks, hotels and media facilities will be built on a budget of US$1.4 million.
When the Olympics has been and gone, the winter sports venue is expected to host millions of Chinese tourists every year. However, history shows the event has not always spurred growth in the aftermath.
Many host cities in the past, including Vancouver and Beijing, have struggled to turn a profit from Olympic venues once the Games have finished. The International Olympic Committee has even sponsored research into the issue to figure out why this is the case.
Byun Sung Jin, an analyst at Mirae Asset Securities, told Bloomberg; “The government will have to be prudent in what projects they spend on so they don’t gather dust after the games are over. We’ve seen that happen before and I’m pretty sure that is on the top of the list of things the government doesn’t want to repeat.”
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