A proposal to host a regional Commonwealth Games at almost half the cost of the eventual government plan was provided to senior bureaucrats at the government's major events and tourism company called Visit Victoria.

Documents seen by 7.30 reveal that in 2021, Commonwealth Games authorities pitched Visit Victoria a 12-day event with Melbourne acting as the host city alongside regional centres Geelong, Bendigo and Ballarat.

The proposed Games were costed at $1.4 billion, which included the cost of infrastructure upgrades that amounted to $375 million.

The use of existing sporting facilities in Melbourne and Geelong was emphasised in the pitch to keep costs down.

In 2022, the Victorian government opted to pursue its own five-city plan in regional areas which did not include Melbourne hosting any events. It also proposed at least two new facilities be built, a velodrome in Bendigo and an Olympic-size pool in Geelong. This was something Commonwealth Games authorities advised against.

The overall cost of the government's regional Games concept was initially costed at around $2.6 billion, however, last week the Victorian premier announced the projected cost had ballooned to over $6 billion.

Shaun Creighton, a former Olympian who has since worked as a lawyer for the Commonwealth Games, says the government could have easily managed to execute a cheaper event.

He told 7.30 the government's contract with the Commonwealth Games Federation (CGF) would have included scope to lower costs that could have been achieved by holding events in Melbourne.

"Just because the contract said the Games would be hosted in Geelong, Shepparton, Gippsland and Bendigo it doesn't mean certain events couldn't be conducted in Melbourne as part of a variation [of the contract] if that became a more cost-effective model," Mr Creighton said.

"The fact there appears to not have been negotiations by the state government to try and come up with a suitable alternative, which could've been done by a variation of the contract, is one of the more extraordinary parts of this whole saga."

'On the hook for damages'

In a statement, a government spokesperson did not respond to specifics around the Commonwealth Games pitch but said Victoria stepped in at the last minute to hold the Games but never agreed to host it "at any cost".

"The main reason we agreed to host the Games was to deliver lasting benefits in housing, tourism and sporting infrastructure for regional Victoria."

However, the government could now be forced to pay up to half a billion dollars in compensation for breaking its contract with the CGF.

Negotiations with government lawyers in London stalled last week and the CGF is demanding the compensation partly to incentivise another city to host the Games.

Mr Creighton said the government was in a weak negotiating position given they had broken the terms of the contract.

"The Commonwealth Games hold all the power. They're the ones whose contract it is and the Victorian government is the party that has breached, so they're the ones on the hook for damages whatever that amount may be," he said.

"They [Victorian government] are now in the hands of the CGF to see what the amount of damages is going to be."

Having seen previous Commonwealth Games contracts, Mr Creighton believes half a billion dollars "is about right" in terms of how much the CGF will be seeking.

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