Rio de Janeiro State Government Facing “Financial Calamity” Less Than 50 Days Until Olympic Games

 

Rio de Janeiro State Governor Francisco Dornelles has declared an unprecedented “state of public calamity in financial administration” with less than 50 days until the Opening Ceremony of the Olympic Games.  The acting governor begged for financial support from the Federal Government in order to avoid a “total collapse in public security, health, education, transport and environmental management”.

A lack of support could also prevent “the fulfillment of the obligations as a result of the Olympic and Paralympic Games Rio 2016”.  The declaration of a state of emergency should enable the Government to borrow funds without approval from the State legislature.  With financial problems in the State Government well-known in recent months, the extreme nature of Dornelles’ plea for help shows the increasingly dire nature of the problem.  Thus, it is a fresh blow for Olympic organizers.

Brazilian cities have made similar announcements in the past, but it is considered the first time a State Government has done so.  Dornelles is aiming “to call the attention of the whole society of Rio to the problems the state has, opening the way for us to take very tough measures”.  Brazil’s interim president, Michel Temer, has already reportedly agreed to disburse federal funds to cover Rio’s shortfall, prioritizing any projects considered necessary for the Olympic Games.

“We knew since last year that the financial state of Rio state was critical,” said Rio 2016 executive director of communication, Mário Andrada.

“We work with them every single day.

“They have fulfilled all their obligations for the Games.

“They created a state law for tax breaks that we were able to use.”

Responsibility for Games-related projects is split between the Federal, State and Municipal Governments, as well as the Organizing Committee and private investors. The State Government has already been blamed for the failure to treat pollution levels in Guanabara Bay, while they are also responsible for the completion of transport projects vital for the Games.  This includes the subway extension to link the city centre with the main Olympic Park in Barra de Tijuca.  A payment of BRL$989 million (£193 million/$280 million/€246 million) to the state, considered vital for the completion of the line, was rejected earlier this month by the Brazilian National Development Bank due to a failure to pay-back previous loans.

Temer has promised the funds will be delivered by “the start of next week,” but any further delay could be fatal considering the line is scheduled to be opened on August 2, just three days before the Opening Ceremony.

By Nick Butler

Republished with permission from insidethegames.biz.

 

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