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 It may seem like a familiar script for major sporting events. As the
start date nears, the headlines invariably focus on delays and the
scramble to get ready on time, and yet the games end up going ahead
without major hitches.
Rio 2016 may, though, end up being one of global sport's closest
calls yet, resulting in a race against time that would inevitably
inflate the current 40-billion-real ($13.2 billion) price tag and
add to the burden on Brazil's struggling economy.
At around this stage in the run-up to the 2012 London Olympics,
almost 80 percent of venues and infrastructure had been completed.
In Rio, only about 10 percent of 56 Olympic construction, overlay
and energy projects have been finished.
While the latter figure excludes 11 existing stadiums that need no
renovation, the figures highlight a gulf in preparations that could
put Rio in the same league as Athens in 2004, where only half of the
venues were ready five months before the start.
In the Greek capital non-essential parts, such as a roof for the
aquatics center, had to be scrapped. Worryingly for Rio, a quarter
of projects have still not started and don't even have fixed time
frames or cost estimates.
"There's still a lot to be done," said Michael Payne, who worked at
the International Olympic Committee (IOC) for over 20 years and
helped Rio put together its bid, adding that a last-minute scramble
was probably inevitable.
In Brazil, any hike to the overall cost will be hard to stomach for
a country in the midst of an economic slump and a fiscal austerity
drive. Public anger over issues including the inflated costs for
World Cup stadiums brought more than a million people on to the
streets in 2013.
A giant corruption scandal at state-run oil company Petrobras, which
has implicated several construction firms delivering Olympic
projects, adds to the possibility of delays.
So far companies and the government say the scandal will have no
effect, but a number of smaller engineering firms have gone bankrupt
as a result. Curtailed access to credit markets means cash flow
could become a major headache for builders.
Brazil's government, as with all Olympic hosts, has guaranteed to
finance any cost overruns.
Costs tend to surge during a last-minute scramble ahead of big
events as contractors can demand higher prices for urgent work.
For Athens, the final push, with three shifts being worked at every
venue, meant the initial budget doubled to $11 billion. Economists
say the debts the country took on to complete the games contributed
to Greece's financial decline.
For sure, Brazil could better absorb an expanded Olympics bill. The
estimated total budget, even with huge infrastructure projects like
a subway extension and port regeneration, is only half a percent of
gross domestic product. In Greece the final cost was nearly 5
percent of the country's GDP that year.
"The longer you wait the more expensive it gets," said Bent
Flyvbjerg, an Oxford University professor who specializes in major
construction projects.
Brazilian officials bat away criticism, saying comparisons with
other Olympics are misleading. They point to Brazil's hosting of the
soccer World Cup last year when, despite stadiums being handed over
later than ever, the event was a success.
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"London and Rio are very different. The laws are different, the
processes are different. We are a developing country and we have our
own characteristics," said Marcelo Pedroso, acting head of the
Public Olympic Authority. "I'm relaxed about saying that there is no
problem with where we are in our preparations."
POWER PROBLEMS
Such confidence seems at odds with the scene at Deodoro, the
second-largest cluster of Olympic venues located west of Rio, where
11 sports including equestrian, BMX biking and kayaking will take
place.
Trucks now busily shift dirt around, but major construction is still
limited. A few pieces of scaffolding, about two storeys high, emerge
from the flattened red earth.
On the other side of town, organizers still need to tender contracts
for a beach volleyball stadium on the sands of Copacabana. As for
the picturesque but polluted Guanabara bay where the sailing will be
held; the city has admitted promises to get it clean will not be
kept.
Companies have also not yet been selected to build other temporary
venues for rugby and mountain biking. These structures can be put
together relatively quickly, but experts say long-term planning is
vital to ensure the venues are safe and of high quality.
Last year, John Coates, a senior IOC official, described Rio's
preparations as the "worst I have experienced." Since then work has
accelerated and the IOC has adopted a softer tone, but acknowledges
the timeline remains tight.
One of the most crucial contracts yet to be tendered is for the
supply of power to Olympic venues, a complex job that involves
hundreds of kilometers of cable and thousands of distribution
panels, sources involved in the projects say.
In London the power contract was announced 20 months before the
Games began. In Rio there are now just 15 months to go.
The delay can slow the progress of other projects, which need to be
designed and built in conjunction with the power supplier to
integrate the amount of available energy.
One thing, however, is certain: the Olympics start date of Aug. 5
next year.
"It means you just have to throw more money at the thing to get it
finished... The only variable you have is to spend more money," said
Flyvbjerg.
(Editing by Todd Benson and Stuart Grudgings)
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