Rio 2016 Olympics Plans Cuts to Stay Within $1.9 Billion Budget

  • Olympic Committee meeting this week to find cost savings
  • Olympics preparations taking place amid economic turmoil

Organizers of next year’s Rio de Janeiro Olympics are making cuts to ensure they stay within the event’s 7.4 billion reais ($1.9 billion) budget and prevent the need for Brazil’s embattled government to bail them out.

The games, the first to be held in South America, begin on Aug. 5 and the run-up is taking place amid the worst economic crisis in Brazil’s recent history, with soaring unemployment, a steep government budget deficit and a plunging currency that’s led to President Dilma Rousseff’s approval ratings falling into single digits.

The cuts will not affect any structures related to the operation of sporting events, said Mario Andrada, head of communications for the games. Andrada suggested as much as 10 percent of savings need to be found in order to ensure no cost overruns. Savings can be found by reducing volunteers and printed material, and by scaling down backdrops at event venues, he said. Final decisions will be made this week.

“What we are trying to do is identify if there is any fat and save on the fat,” Andrada said by phone. “We cannot go a penny over budget.”

Organizers are paying for the costs of the games through sponsorship, ticket sales and a grant from the International Olympic Committee. When Rio was awarded hosting rights in 2009, Brazil’s government pledged to make up $700 million of any shortfall.

The budget discussions are the final ones before the games start in 10 months, and build on previous cost-control efforts. Last year the committee scrapped a plan that would have led to millions of dollars in spending to upgrade Rio’s Maracana stadium for the opening ceremony. Organizers also told cities hosting the soccer tournament that they would have to meet staging costs.

The austerity measures were first discussed by the head of the Rio 2016 organizing committee in an interview with Bloomberg News in September.

With inflation running at 9.53 percent in the year through August, Sidney Levy said he may pare down costs of local purchases by buying cheaper non-essential goods and services.

“The money will add up, we are going to make it add up, that’s my job,” he said.

Preparing Rio to become the first South American Olympic host has been bumpy. Massive public protests over the country’s spending priorities in 2013, ahead of last year’s soccer World Cup, jolted local politicians and Rousseff’s government. That led to squabbling over who should pay what for the Olympics, which has a total price tag of almost 39 billion reais, and criticism from the IOC over delays at key projects.

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