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Rio says pre-Games spending will Benefit its Residents

RIO DE JANEIRO — Almost US$11 billion (S$13.7 billion) will be invested on major transportation and environmental projects not related to Rio de Janeiro’s staging of the 2016 Olympic Games, as the city’s mayor Eduardo Paes insisted they would not “waste” taxpayers’ money like Beijing did after it hosted the 2008 Games.

More than 2,000 workers have been on strike at the Olympic Park for the past two weeks. Photo: Getty Images

More than 2,000 workers have been on strike at the Olympic Park for the past two weeks. Photo: Getty Images

RIO DE JANEIRO — Almost US$11 billion (S$13.7 billion) will be invested on major transportation and environmental projects not related to Rio de Janeiro’s staging of the 2016 Olympic Games, as the city’s mayor Eduardo Paes insisted they would not “waste” taxpayers’ money like Beijing did after it hosted the 2008 Games.

Brazilian government officials, who made the announcement on Wednesday, said the money in the so-called “legacy” budget would have been spent without the Olympics. Officials said 57 per cent is public money with the 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 World Cup, which opens in two months. Any anger will focus on the lavish spending for the football tournament — about US$11 billion — compared with high taxes and poor schools and hospitals.

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 US$40 billion on the 2008 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 honour wasted public money. We are not going to do this here.”

The Rio Games have been plagued by delays and hold-ups over what level of government pays for what. The budget announcement came as 2,300 construction workers remained off the job on Wednesday in a two-week strike at the Olympic Park, the main cluster of venues located 25km west of Rio’s Copacabana beach area.

Several International Olympic Committee (IOC) members lambasted Rio’s preparations last week at the SportAccord conference in Turkey, saying the Games were more poorly organised 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 its Executive Director for the Olympic Games, Gilbert Felli, to Rio to serve as the point man. Unveiling the US$10.8 billion budget for big-ticket items comes after two separate budgets were announced in January.

The Rio Olympic organising committee in January said its operating budget would be US$3.1 billion. This is the money for operating the games themselves. Income is from the Switzerland-based IOC, and from marketing, tickets sales and local sponsorship sales.

A third budget was also announced in January: US$2.5 billion 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 that each one has had cost overruns with “100 per cent consistency”, wrote authors Bent Flyvberg and Allison Stewart. They added: “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 learnt to their peril.” AP

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