Berlin's potential 2024 Olympic bid could be the wrong financial decision with the city deep in debt and lacking the infrastructure to host such a global event, the German Institute for Economic Research (DIW) said on Wednesday.
Berlin, which staged the Games in 1936, and Hamburg are battling for the green light from the German sports authorities to launch a bid for the 2024 summer Olympics.
A decision by the German Olympic Sports Confederation (DOSB) will be taken in March.
Boston and Rome are the other two cities to officially announce their candidacy but others, including possibly Istanbul, Budapest and Paris, are likely to join the race by the September deadline.
The International Olympic Committee (IOC) will select the winning bid in 2017.
The German capital, though, should think twice about launching such a candidacy, said Karl Brenke, of the influential DIW, who specializes in macroeconomic developments in Germany.
He said history had shown initial estimates for the Games compared to what they end up costing were never the same while budgets only include the cost for the duration of the Games.
"Costs that are Games-related and come up after the Olympics are systematically blended out," he told Reuters.
"From the figures we have so far there is very little information about what they will actually cost for Berlin."
Berlin officials have not provided a specific figure yet but some estimates put the projected cost at about 2.5 billion euros ($2.83 billion), roughly the same as past Games.
However, that does not include any other related investment in infrastructure that may not be directly linked to the competitions but may be necessary for the event.
These generally include access roads, upgrading of public transportation and airports among other things which can command a total outlay several times larger than the Games budget.
"The state of Berlin has at the moment a debt of 65 billion euros. I have the feeling that Berlin is sliding into something it may not be able to lift," said Brenke.
"But then again Berlin has experience in that," he added with reference to the city's new airport that has yet to open more than four years past its original delivery date due to a string of delays and construction problems.
Brenke said other German federal states, providing some funds to the capital, would not be happy to see "Berlin affording itself the luxury of hosting the Olympics."
He added that Hamburg's candidacy would be equally problematic with the city having fewer venues, and no Olympic stadium, compared to the capital but a better urban infrastructure.
"If you look at the Olympics or the World Cup, the only real winner is (world soccer's governing body) FIFA or the IOC. The city is always asked to pay more."
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