Rio 2016 Finds Agreement to Ease Olympic Energy Crisis

  • Consortium chosen to supply temporary energy to three sites
  • Value of energy contract said to be 150 million reais

Rio’s Olympic organizers have moved a step closer to solving one of the biggest problems they face before the start of the 2016 Summer Games: They’ve picked a group that will supply temporary energy for three vital sites.

Organizers struggling to strike a deal for energy suppliers were forced to turn to regional and federal governments to foot the bill when the estimated cost almost doubled to about 450 million reais ($115.5 million). The energy component of the games was supposed to have been secured by a self-imposed deadline of Oct. 31.

After taking tenders from three groups of service providers, Rio 2016’s technical committee selected one to supply energy at three sites, according to a person familiar with the matter. The cost is being met by Rio’s state government, which is responsible for the energy needs of those sites: Copacabana, Deodoro, and the Maracana stadium that will host the opening and closing ceremonies. The person declined to identify the companies in the winning group because the two losing bidders had not been informed of the result.

A spokesman for Rio 2016 didn’t immediately respond to a request for comment. A spokesman for the state government didn’t respond to a call or e-mail for comment.

The deal doesn’t cover the main Olympic Park or the International Broadcast Center, a critical venue for the International Olympic Committee to send images around the world. The costs of energy in those venues is the responsibility of the federal government, which has yet to announce any agreements.

With Rio’s energy plan so far behind schedule, the IOC demanded organizers draw up a backup plan should it not be able to reach an agreement to get grid power to its venues. That plan is powering the entire games on generators, which would be less environmentally friendly.

"Our target is to use as much grid energy as possible," wrote the organizers in a sustainability report published last year. "Rio 2016 has been working with the Rio de Janeiro electrical utility provider to provide the base power-supply capacity and primary back-up power to our key venues with energy from the grid."

That utility company, Light, said today that a deal for temporary energy with the government might be announced next week. The utility didn’t comment on supplying primary energy.

"It’s good for a Plan B, but it’s not good enough for Plan A,” Rio 2016 spokesman Mario Mario Andrada said in a recent interview about the possibility of powering the games solely on backup generators. "We’d rather stick to the Plan A."

Rio organizers have been struggling to keep to a 7.4 billion reais budget, cutting costs across the board, including luxury cars and gourmet food for VIPs. As a result of the cost-crunch, the regional and national governments took responsibility for energy.

With the Brazil in the midst of its longest-recession since 1931, finding the funds to pay for the Olympics hasn’t been easy. The state of Rio passed a law earlier this year to fund the energy contract through a tax break for the winning bidders.

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