Olympics costs—prevarication and procrastination

Brazil has not been shy in splashing out to showcase the Rio Olympics in London. The country took over part of the huge mansion Somerset House which it used to host exhibitions -- including videos of a futurisitc Rio juxtaposed with the incongruous plastic artist Nelson Leirner -- and to hold ad hoc events. The country even hired out part of Crystal Palace park, reputed to have been the most expensive training ground at London, for its athletes.

But if Brazil was happy to flaunt some wealth in London, officials are being very coy about the costs that Rio itself might bear to host the games.

Márcio Fortes, coordinator of the Rio games, has said that the costs won’t be nearly as much as the £11bn spent in London. He points out that they are not being held in an area that needs regeneration as they were in London. But much of the lower costs are an accounting sleight of hand: much basic infrastructure will be tallied as part of the Federal growth acceleration programme rather than paid for by the state of Rio itself.

Rio de Janeiro mayor Eduardo Paes has elections looming in October and any admission that costs might spiral would be political dynamite. But custo Brasil and Brazilian construction companies’ well-known ability to extract additional monies from the government when delays become unbearable likely mean the games will cost far more than anyone is yet prepared to admit. London's legacy games may seem a bargain in comparison.

About admin

I've been researching and writing on Brazilian financial markets, industry and economy since 2006 for a wide range of specialist media, consultancies and investors. Before that I spent over 10 years in London and New York writing for and editing magazines and journals dedicated to finance, investment and economics in developing markets, mostly for the Euromoney Institutional Investor group and Thomson Financial. Areas of coverage Below are samples of areas that I cover and some of the common themes that I investigate. Capital markets BM&FBovespa markets *capital raising trends: via equities (IPOs and secondary issuance), debt and loans *the asset management industry: legislation and coverage of the key hedge, pension and investment funds * corporate governance: how the regulator is seeking to strengthen best practice and limitations * debt markets: the nascent corporate markets, attempts to boost liquidity and new insturments. * private equity market: why this market has been so successful, who’s involved. *electronic, high frequency trading and alternative trading platforms: what does the future hold? Banking *credit: the growth of consumer and business credit and competition between banks and models *Public versus private: the role and market share of public and private sector banks and the politicization of the industry * internationalization: which Brazilian banks are expanding overseas and where * investment banking: the growth of the domestic market and who’s winning which mandates *regional banks and development banks: what role they play in the industry and how they compete Mining *licensing: the complex process of obtaining environmental, water, land and operating licenses at a state and federal level. * capacity: the feasibility and sustainability of capacity increases * financing: how miners are raising finance in Brazil and abroad *competition: the interplay Vale, MMX and junior miners *logistics: rail, road and port connections Oil and gas: the fund raising issues related to the massive of pre-salt (link) Multilatinas: Who are they and how and where they are expanding Meatpacking: Are debt burdens sustainable, what are the different business models for areas such as branding and distrbution Agriculture: How are farms consolidating, what are environmental risks, how can foreign investors be involved. IT and software: Can Brazil take on India and build a viable long-term IT industry? For more information on clients and work, please see the media and consultancy sections.
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