British Columbia officials have long argued the Games will costs its taxpayers C$600 million, but the province's auditor general said that ignores projects such as the C$600 million upgrade to the highway from Vancouver to the resort community of Whistler where most ski events will be held.

"Given the province has the ultimate responsibility for the financial outcome of the Games, we feel there should be a regular and complete reporting of the Games' cost to taxpayers," Arn van Iersel wrote.

The report said the western Canadian province's actual cost will be C$1.5 billion, and taxpayers will also be responsible for C$389 million in local government spending and C$607 million in federal spending.

The report also warned the 2010 Games may fall short of producing the projected C$4 billion in economic benefits such as increased tourism, because International Olympic Committee rules prevent them from starting international marketing efforts until after the 2008 Olympics in Beijing.

The 2010 Games in the Pacific coast city have lost about C$150 million in expected revenue from international sources because organizers do not have a currency hedging strategy, the report said.

Van Iersel said that while Games organizers appear to be doing a good job managing preparations for the event, the province should do more oversight to prevent budget overruns on construction.

Vancouver organizers had originally estimated building venues such as the speed skating oval would cost C$470 million, but rising costs of construction materials and labor in Western Canada forced them to increase it to C$580 million this year.

British Columbia and the federal government have agreed to share the added costs, but Ottawa has said it will not pay for any future construction cost overruns.

British Columbia's Economic Development Minister Colin Hansen defended the government's forecast of what it will cost taxpayers to host the international event, saying projects such as the highway upgrade were not part of Olympics preparations.

"Had we not won the Games, guess what, that project would have been built," Hansen said.

There was no schedule for upgrading the scenic but winding road to Whistler prior to Vancouver's bid for the Olympics, but it was promised after IOC members expressed concern about the sometimes dangerous mountain highway.

Hansen also downplayed the auditor's worried that operating costs, such as providing security for athletes, might have been underestimated. "The Games will be a success," he told reporters.

The Vancouver Organizing Committee said the report offered "valuable observations," and it is confident that all needed venues can be built within the C$580 million budget it revised this year.

($1=$1.12 Canadian)