IOC warned Rio on construction contracts five years ago: documents

Thu Jul 28, 2016 8:04pm EDT
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By Stephen Eisenhammer

RIO DE JANEIRO (Reuters) - The International Olympic Committee warned organizers of the Olympics in Rio de Janeiro five years ago that construction contracts they drew up could give developers incentives to cut corners, presaging problems with athletes' housing that drew complaints from several countries this week, documents showed.

Rio's city government, responsible for the vast majority of infrastructure projects for the Games, has used public-private partnerships, or PPPs, to get private firms to cover the cost of building venues in return for permission to build real estate on the sites.

Rio's mayor, Eduardo Paes, has taken pride in the fact that 57 percent of the nearly 40 billion reais ($12.3 billion) spent on the Olympics is private money, garnered by using PPPs on a scale never before seen at a Games.

Yet criticism erupted this week over the quality of the work at the privately funded Olympic Village. Australia said housing was "not safe or ready" and other countries such as Italy, Argentina and New Zealand also expressed concerns.

In documents seen by Reuters, the IOC told the city in 2011 it needed to carefully monitor its partners because they might pay more attention to their own commercial interests than delivering Olympic projects on time and to high standards.

"The city recognizes that the PPP contractor most likely has two primary objectives, maximize land value and deliver venue obligations at least cost," the IOC said in one of the documents assessing infrastructure plans for the Games, seen by Reuters using a freedom of information request.

"The city must be diligent in making sure the Games obligations are fully met," the IOC said.

Rio city officials did not respond to requests for comment. The IOC said in a statement that it was very supportive of Rio's efforts to ensure the Games venues were constructed in an efficient and cost-effective way, while making sure that what was needed for the Games was delivered.   Continued...

A view of one of the blocks of apartments where Canadal's athletes competing in the Rio 2016 Olympic Games are supposed to stay in the Olympic Village in Rio de Janeiro, Brazil, July 23, 2016. Picture taken July 23, 2016. REUTERS/Ricardo Moraes