Brazil unveils $11 billion in ‘legacy’ budget
RIO DE JANEIRO (AP) — Brazilian government officials announced Wednesday that almost $11 billion (24.1 billion Brazilian reals) will be spent on major transportation and environmental projects, which they argue are not related to holding the 2016 Rio de Janeiro Olympics.
Officials say the money in the so-called “legacy” budget would have been spent without the Olympics. Officials said 57 percent is public money with rest coming from the private sector.
This is the third budget announcement in three months with government and Olympic officials unveiling them in a stream of smaller chunks.
Brazil is bracing for protests during the upcoming World Cup, which opens in two months. Any anger will focus on lavish spending for football tournament — about $11 billion — compared with high taxes and poor schools and hospitals.
Rio Mayor Eduardo Paes, who dominated Wednesday’s announcement, argued the spending would benefit ordinary Cariocas, which is how Rio residents are known. He also suggested Rio would be rejuvenated the way Barcelona was by the 1992 Olympics, a comparison many question.
Paes also took a shot at the lavish spending of $40 billion on 2008 Beijing Olympics.
“We’re not going to build a Bird’s Nest in Rio de Janeiro,” Paes said, referring to Beijing’s 90,000-seat stadium that now sits largely vacant. “If you go to Beijing today the Bird’s Nest has become a mausoleum to honor wasted public money. We are not going to do this here.”
The Rio games have been plagued by delays and holdups over what level of government pays for what.
The budget announcement came as 2,300 construction workers remained off the job Wednesday in a two-week strike at the Olympic Park, the main cluster of venues located 25 kilometers (15 miles) west of Rio’s Copacabana beach area.
Several IOC members lambasted Rio’s preparations last week at the SportAccord conference in Turkey, saying the games were more poorly organized than the 2004 Athens Olympics — the benchmark for delays.
IOC President Thomas Bach declined to rule out the possibility of moving the games, and few think it will happen. However, the IOC is keeping the pressure on, sending Gilbert Felli, the IOC’s executive director of the Olympic Games, to Rio to serve as the point man.
Unveiling the $10.8 billion budget for big-ticket items comes after two separate budgets were announced in January.
The Rio Olympic organizing committee in January said its operating budget would be $3.1 billion (7 billion reals). This is the money for operating the games themselves. Income is from the Switzerland-based International Olympic Committee, and from marketing, tickets sales and local sponsorship sales.
A third budget was also announced in January: $2.5 billion (5.6 billion reals) to build about half of all the infrastructure projects needed specifically for the games. This number will rise and is to be updated every six months.
The IOC requires that host cities and governments cover any deficit.
A recent study by Said Business School at Oxford University of Olympic Games since 1960 showed each one has had cost overruns.
“The games overrun with 100 percent consistency,” authors Bent Flyvberg and Allison Stewart wrote. “No other type of megaproject is this consistent regarding cost overrun.”
They concluded: “The data thus show that for a city and nation to decide to host the Olympic Games is to take on one of the most financially risky type of megaproject that exists, something that many cities and nations have learned to their peril.”
Filipe de Almeida of AP partner agency SNTV contributed to this report.
Stephen Wade on Twitter: http://twitter.com/StephenWadeAP