Rio Olympic CEO says privately-run budget needs public money

Sidney Levy, CEO of the Rio Olympics, said that his privately-funded operating budget needs about $30 million in public funding to meet its obligations.

By: AP | Rio De Janeiro | Published:September 19, 2016 1:04 am
rio-closing-ceremony-m Rio organizing committee received a last-minute reserve fund of 150 million reals from the city of Rio de Janeiro. (Source: Twitter)

The CEO of the Rio Olympics said Sunday his privately funded operating budget needs just under $30 million in public funding to meet its obligations.

Chief executive officer Sidney Levy had pledged that only private money would be used to run the games. That promise was broken just over a month ago when the committee requested a bailout from the city of Rio de Janeiro and the federal government to run the Paralympic Games.

Levy, speaking on the final day of the Paralympics, said “we committed ourselves to hosting the games without any public funds, but during the journey there were a lot of ups and downs” that led to the overrun.

The operating budget is for running the games themselves, and does not include roads and stadiums built to prepare the city. In a conservative estimate, Rio spent between $10-12 billion in public and private money readying the city _ much of the private money lured in by tax concessions and favorable loan terms from government lenders.

Levy, who promised early in his term to run an operating committee free of corruption, said the final figure for the operating budget was $2.8 billion. He said the final government contribution would not be more than 1 percent of that.

The dollar-denominated budget number has fluctuated over the years because of wide swings in that currency’s value against the Brazilian real.

The Rio organizing committee received a last-minute reserve fund of 150 million reals ($45.9 million) from the city of Rio de Janeiro. Levy said he expects to use about two-thirds of that fund.

Brazil’s federal government also came up with another 100 million reals ($30.6 million). This comes in the form of “sponsorships” from three state-run entities, including the scandal-plagued oil company Petrobras.

Levy said he does not regard the “sponsorship” as government money, although organizing committee members acknowledged they lobbied Brazil’s federal president Michel Temer for the outlay.

“This is a right Petrobras has to purchase this sponsorship as many other privately owned and other state-run companies do,” Levy said. “It is not government money that could be used for other things. It’s their advertising money.”

Levy then added: “By the way, they paid very little for it. It was very cheap for them.”

Levy said the annual salaries for its eight top directors would be available at the end of the year. The Brazilian newspaper Estadao reported last month the eight were paid an average of $25,000 per month in 2015.

Levy also said the audit results of his budget would be made available.

“We follow the rules of all private companies that are listed on the stock market in Brazil,” Levy said. “Our (financial) statement cannot be doubted because they are audited and published. I insist on that.”