500 days out, Rio risks Olympics cost surge as building lags

Fri May 8, 2015 1:02am EDT
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By Stephen Eisenhammer

RIO DE JANEIRO (Reuters) - With less than 500 days until Rio de Janeiro hosts the Olympic Games, construction of several venues has not started and some major contracts have not even been tendered, setting the stage for a last-minute rush that will likely drive up costs.

It may seem like a familiar script for major sporting events. As the start date nears, the headlines invariably focus on delays and the scramble to get ready on time, and yet the games end up going ahead without major hitches.

Rio 2016 may, though, end up being one of global sport's closest calls yet, resulting in a race against time that would inevitably inflate the current 40-billion-real ($13.2 billion) price tag and add to the burden on Brazil's struggling economy.

At around this stage in the run-up to the 2012 London Olympics, almost 80 percent of venues and infrastructure had been completed. In Rio, only about 10 percent of 56 Olympic construction, overlay and energy projects have been finished.

While the latter figure excludes 11 existing stadiums that need no renovation, the figures highlight a gulf in preparations that could put Rio in the same league as Athens in 2004, where only half of the venues were ready five months before the start.

In the Greek capital non-essential parts, such as a roof for the aquatics center, had to be scrapped. Worryingly for Rio, a quarter of projects have still not started and don't even have fixed time frames or cost estimates.

"There's still a lot to be done," said Michael Payne, who worked at the International Olympic Committee (IOC) for over 20 years and helped Rio put together its bid, adding that a last-minute scramble was probably inevitable.

In Brazil, any hike to the overall cost will be hard to stomach for a country in the midst of an economic slump and a fiscal austerity drive. Public anger over issues including the inflated costs for World Cup stadiums brought more than a million people on to the streets in 2013.   Continued...

A view of the construction site of the tennis centre venue at the Rio 2016 Olympic Park in Rio de Janeiro May 7, 2015. REUTERS/Sergio Moraes