Rio Olympics operating budget rises by 27 percent

Published on NewsOK Modified: January 23, 2014 at 4:48 pm •  Published: January 23, 2014
Advertisement
;

RIO DE JANEIRO (AP) — The operating budget for the Rio de Janeiro Olympics in 2016 was announced at 7 billion reals ($2.9 billion) by organizers on Thursday, an increase of 27 percent over the figure submitted in the 2009 bid.

The operating budget is only for organizing the games themselves, and has been delayed for months with Brazil's three levels of government debating over who pays what.

A separate and much larger capital budget — a mix of private and public funds — will be unveiled next week and could top $11 billion. This is for building roads, subway lines and other improvements triggered by the games.

Organizers moved many costs from the operating budget to the public treasury, making comparisons to the original submission in 2009 difficult.

In addition, the Brazilian currency, the real, has fallen in value against the dollar. The real was calculated at $1 equals 2 reals in the 2009 bid document. On Thursday, $1 equaled 2.4 reals.

Organizers said inflation in Brazil from January 2009 to December 2013 was 39 percent.

"There was a negotiation process with the government," said Leo Gryner, the chief operating officer of the organizing committee. "They signed off on our budget. ... They agreed that this is a good use of the 7 billion reals, so you are going to spend that. Everything else will be covered by us (government)."

IOC President Thomas Bach called it a "very reasonable" operating budget after meeting on Tuesday in Brasilia with President Dilma Rousseff.

"All the recent games, in the operational budget, have delivered a profit," Bach said.

However, Andrew Zimbalist, a sports economist at Smith College in Northampton, Massachusetts, who studies the Olympics, said Bach's use of the word "profit" was misleading.

"This (operating budget) is a small portion of the investment that gets made," Zimbalist said. "They can talk about it all they want. More often than not there is a deficit. Sometimes it's balanced, though it can be balanced by accounting chicanery. And a few times there have been modest surpluses. But it just doesn't mean a heck of a lot."

Continue reading this story on the...