Brazil Estimates Cost Of Rio Olympic Games At $2.3 Billion, Although Price Expected To Rise

In this photo released by Rio 2016 Organizing Committee for the Olympic and Paralympic Games, youths form the number 1,000 to mark the number of days before the start of the Rio 2016 Olympic Games inside Mangueirao stadium in Belém, Brazil, Friday, Nov. 8, 2013. (AP Photo/Alex Ferro, Rio 2016 Organizing Committee for the Olympic and Paralympic Games) (AP2013)

Brazil released earlier this week its first estimates for the cost of the 2016 Olympic Games in Rio de Janeiro, which sit at $2.3 billion, although these costs are expected to rise.

Brazil's Public Olympic Authority initial approximation includes spending by federal, state and municipal governments for projects that include both state-funded and public-private partnerships. This estimate, which is expected to revised in March, only includes expenditures directly related to the Olympics and not infrastructure projects, such as airports, that will be constructed for the games.

The initial figure is much lower than the previous two Olympic games, with the 2012 London Games estimated at $.4.4 billion (with the final budget being $10.4 billion) and the upcoming Sochi games in Russia thought to be around $50 billion. Still officials said last week that the costs of the Olympics in Rio, and the accompanying Paralympics, had jumped 27 percent from prior estimates due to factors such as inflation and costs for new technology.

A quarter of the budget was originally slated to come from government coffers, but Brasilia has said that it won’t take public money.

When Rio de Janeiro bid on the games in 2009, officials estimated that the total cost of the game would be $11.4 million.

Brazil is already bogged down in a lumbering construction process for the upcoming World Cup this summer, which is expected to run the government about $11 billion for stadium and infrastructure construction. The process, however, has been hindered from the start and have many worried if the stadiums and accompanying facilities will be ready by June.

“For now, though, the biggest concern for Brazil is beginning and finishing the myriad construction projects that were part of its World Cup and Olympics bid proposals,” Andrew Zimbalist, a Robert A. Woods Professor of Economics at Smith College, wrote in the Americas Quarterly. “The obstacles are severe: they include labor shortages, bureaucratic encumbrances, political corruption, legal entrapments, insufficient funds, incompetence, and inadequate infrastructure.”