to help cover deficit of local Olympic committee: mayor
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[August 24, 2016]
By Stephen Eisenhammer
RIO DE JANEIRO (Reuters) - Rio de
Janeiro's City Hall will help cover the deficit of the local Olympic
organizing committee if necessary, Mayor Eduardo Paes said in an
interview on Tuesday, going back on assurances that the committee
would be entirely privately funded.
The local organizer, known as Rio 2016, is a private company
responsible for running the Olympics and Paralympics using funds
from ticket sales, sponsorship, merchandise and broadcast proceeds
passed on by the International Olympic Committee (IOC).
That it was fully private, unlike for London's Games for example,
was a key part of Rio's claim to hosting a sustainable games which
used public money mainly for legacy projects instead of for the
But with just 20 percent of tickets sold for the Paralympics, which
start on Sept. 7, and Rio 2016 spending heavily to fix last-minute
problems such as plumbing and electricity in the Athletes' Village,
the committee's finances are stretched.
"If it's necessary we'll help," Paes said. "We won't let the
Paralympics not happen because of that."
The mayor said he expected the city to pay around 100 to 200 million
reais ($31 to $62 million), which he described as "small" in
comparison to the committee's budget of 7.4 billion reais. The total
cost of the Games is around 40 billion reais.
A Reuters report last month put the committee's deficit at between
400 million and 500 million reais. Given unexpected costs during the
Games, that could have risen further still.
A Brazilian judge last week lifted an injunction which stopped the
federal and city government using public money to help finance the
committee, though the judge maintained a previous ruling that
organizers make their accounts public.
Rio 2016 said it is discussing emergency funding with the municipal
and federal governments but that a final figure has not been
"We believe that the fact that we were able to do the Olympic Games
in the middle of a crisis like the one we have without public funds
is already historic," Rio 2016 spokesman Mario Andrada told
Brazil's economy is in the midst of its worst recession since the
1930s. The collapse in the economy, partly due to falling commodity
prices, has been accentuated by a political crisis fueled by a huge
corruption scandal and the impeachment of President Dilma Rousseff.
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A person walks in the rain through the Olympic Park a day after the
closing ceremony of the Rio 2016 Olympic Games, in Rio de Janeiro.
Paes dismissed concerns about the impact on Rio's economy of the
loss of thousands of construction jobs linked to building venues and
infrastructure for the Games, saying a number of large projects were
still in the works.
"I think the Olympics isn't the end, it permits the city to become
better with more opportunity, more vibrant," Paes said, listing a
number of potential mobility projects such as an extension of the
light railway network built for the Games that could provide jobs.
In terms of legacy, the mayor said a tender process had begun to
secure a public private partnership (PPP) for running the permanent
venues in the Olympic park, including the tennis stadium and
velodrome. "There's interest ... I'm confident it will work," Paes
said, adding that four companies had shown interest.
The mayor said lackluster sales of apartments in the Athletes'
Village and lack of plans to build commercial and residential real
estate on the Olympic Park, as originally agreed, had nothing to do
with Olympic legacy because they were predominantly privately
Critics highlight the possibility that these sites are abandoned,
after so much public investment to improve transport links to reach
them, as one of the flaws of the Games.
"I don't count that as legacy," Paes said.
($1 = 3.22 reais)
(Reporting by Stephen Eisenhammer; Editing by James Dalgleish)
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