Rio 2016 to cut costs to avoid 10 percent overspend

By Stephen Eisenhammer

RIO DE JANEIRO (Reuters) – The organizing committee for the 2016 Olympics in Rio de Janeiro is pressing for savings to avoid going over its 7.4-billion-real budget ($1.9 billion) by about 10 percent, a spokesman said on Tuesday.

In the final spending review before the games start in 10 months, some departments are being asked to cut projected costs by as much as 30 percent.

“We need to organize the games to be economically sustainable. There’s no more space for lavish overspending,” said Mario Andrada, communications director at Rio 2016.

The organizing committee’s budget is privately funded, but any deficit will have to be covered by the Brazilian government, an eventuality for which there is little appetite in Brasilia, the capital.

Brazil is in a deep recession, which looks likely to continue into next year, and the government is keen to avoid the usual cost overruns associated with events like the Olympics and the World Cup.

“We are adjusting minor things: printing, backstage structures, structures that are not necessary for the field of play,” Andrada said.

Savings could also come from reducing the number of volunteers and getting some to work at both the Olympics and Paralympics, which would cut the cost of food, uniforms and transportation.

Construction of permanent venues, security and temporary power are covered in a different budget and not paid for by the committee.

The cost-cutting analysis should be finished by next week. Without additional savings, Andrada said the committee was on track to go over budget by about 10 percent.

“In these kinds of organizations you naturally build fat,” he said. “We’re trying to identify that fat.”

($1 = 3.86 reais)

(Reporting by Stephen Eisenhammer; Editing by Dan Grebler)