2016 Olympics May Cost US$700M More

By Jack Whibley, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Monday, August 5th marked three years to go until the first Olympic Games to be held in South America will arrive in the city of Rio. Construction works on the Olympics’ main venues is reported to be on schedule, however a US$700 million budget shortfall has cast some concerns over the three year to go milestone.

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Rio’s Mayor Eduardo Paes and President of Rio 2016, Carlos Arthur Nuzman, during the three years to go press conference, photo by Alex Ferro/Rio 2016.

During the past weeks, three new venues located at the Olympic Park in Barra da Tijuca in Rio’s Zona Oeste (West Zone) began to take shape. Construction of the Barra Sports Halls at the site started on Monday, July 1st when the ground was broken for the construction.

The concrete has been poured for the foundations of the structures was also carried out on schedule. The buildings themselves will begin to be assembled during the second half of 2013.

Organizers report the construction is being carried out so as to achieve LEED certification, which aims to promote the sustainability of buildings, reducing their impact on the environment.

During the Games, the sports halls will host basketball, taekwondo, judo, wrestling (unless cut), wheelchair basketball, boccia, sitting volleyball, and wheelchair rugby. Along with the Aquatic Center, the Velodrome and the Tennis Center, after the Rio 2016 Olympics, the sports halls will form the ‘Olympic Training Center’ for elite athletes – one of the trumpeted legacies of the event.

A Public-Private Partnership (PPP) between the City Government and the Rio Mais Consortium will fund construction of the halls, along with other infrastructure such as the Main Press Center and the International Broadcast Center. PPPs are being used with the aim of reducing the amount of public funding required for the Games.

However, at a press conference on August 2nd to mark the three year to go anniversary, Leo Gryner chief operating officer of the organizing committee said that and extra US$700 million in government money may be needed to meet the operating budget for the 2016 Olympics.

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Works on the Barra Sports Halls for the Olympics has started on schedule, photo by Renato Sete Câmara (EOM)/Rio 2016.

Gryner said that, “Right now as our budget stands we need this US$700 million.” Gryner said that any shortfall in the budget was the result of inflation and Brazil’s slowing economy. A shortfall will materialize if sufficient sponsorship cannot be found.

Gryner continued, “It depends on the economic situation, the environment. We have been very successful so far (with sponsorship). We are very confident, but one ever knows.”

He said local sponsorship has already exceeded the 2012 London Olympics, which totaled about US$1.2 billion.

The operating budget is used to hold the Games and is separate from the money spent to build the venues and infrastructure.

At the press conference, Rio’s Mayor Eduardo Paes was also forced to defend spending on the mega-event. He said that winning the bid to host the 2016 Olympics had been necessary to launch public projects that would have otherwise have taken fifteen years to get off the ground.

“This event was, and is, fundamental for many of the transformations that the city is experiencing,” Paes said in response to persistent questioning from reporters.

Spending on major events such as the 2016 Olympics has been one of the core reasons behind a wave of mass protests across Brazil during the FIFA Confederations Cup in June.

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