Solutions for Rio Olympic Park Remain Elusive

(ATR) The Brazilian Social Development Bank (BNDES) is still analyzing how to secure a private operator for the Rio 2016 Olympic Park.

Last year the Brazilian government created the Olympic Legacy Management Authority (AGLO) to run the large section of the park currently operated by the Ministry of Sports. This section includes Carioca Arena 1 and 2, the velodrome, and the tennis center.

A BNDES spokesperson confirmed to Around the Rings that it signed a contract in March with the Ministry of Planning, Development and Management (MPDG) to develop a plan to find a new operator for the Park. ATR reported in May 2017 that the sports ministry had held preliminary discussions with BNDES about providing financing to entice an operator.

Administration of the park has been in limbo since the Paes administration had sought a 25 year lease for the venues after the 2016 Olympics. A Ministry of Sports spokesperson confirmed to ATR that the ministry ended up signing the lease on Dec. 23 so that the four venues were not left abandoned.

"After a period of talks between the City of Rio de Janeiro and the Federal Government about the scope of this project, the BNDES received in October 2018 a communication from the MPDG defining the scope to be studied and authorizing its beginning," a BNDES spokesperson said in a statement.

Ernani Torres, a Brazilian economist who also worked at BNDES for 35 years, told ATR last year it would make sense for the bank to be involved in securing a private operator. Torres says the bank, which is subsidized by the Brazilian government, can offer lending rates that are much lower than private banks.

The bank would then create an auction for which private companies could bid on the concessionaire and assume operations of the park.

BNDES says that it is in the process of launching a tender to solicit consultants to help develop a public-private partnership for the park. The bank expects the scope of a potential public-private partnership to be formulated by the first quarter of 2019. Only then, will the search for a private operator begin.

"The scope of services performed by technical consultants involves, among other services, the preparation of a commercial evaluation of the potential of the Olympic Park, a Plan and Business, legal assessments and, if necessary, engineering studies," the spokesperson added.

In the interim, AGLO will continue to administer the park as is its mandate. By law, AGLO is a transitional body and only operational until June 30, 2019, unless it can hand off the Olympic Park to an operator earlier.AGLO is made up of the Olympic Public Authority, the government body which was in charge of Olympic construction.

If no operator is found by then, AGLO will legally disband and the Ministry of Sports will begin directly administering the park.

A ministry of sports spokesperson said that AGLO has a budget of $47.32 million in 2019, which "will be approved by the National Congress" but is subject to changes by deputies or senators. Any future budget would be at the will of the National Congress and new potential heads of the Sports Ministry.

This weekend Brazilians will go to the polls for the second time this month to vote for their next president. Polls suggest it is very likely that the far-right candidate Jair Bolsonaro will emerge the winner.

Unless the newly elected president suggests a new alternative for the Olympic Park, it is likely that the current, slow process will play itself out in 2019.

"There was no discussion about the management of the Olympic Park with the candidates for the Presidency of the Republic," a sports ministry spokesperson said.

Written by Aaron Bauer

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