Paralympian Michelle Stilwell, British Columbia Minister of Social Development and Social Innovation, trains for the Paralympics, in Nanaimo, B.C., on Sunday August 14, 2016. Budget shortfalls have forced major Paralympics cutbacks.DARRYL DYCK/The Globe and Mail
Paralympics organizers will combine venues, reduce the number of seats at competitions and run the event with a trimmed-down staff in order to stage the Games on a significantly reduced budget.
But Rio2016, the local organizing committee, will not say how big the budget shortfall is or how the event came to be facing such a critical financial situation just 19 days before the Games begin on Sept. 7.
All 22 Paralympic sports will be played at the Games, International Paralympic Committee chair Sir Philip Craven said Friday – but he could not promise more than that, even if the Games receive a promised bailout from the Brazilian government.
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"Never before in the 56-year history of the Paralympic Games have we faced circumstances like this," he said. "Although we are making progress, the extra funds will not fully plug the Rio2016 deficit. These cuts are on top of the ones we, together with the IOC, have already made in the last 12 months and they are likely to impact nearly every stakeholder attending the Games."
Sir Philip repeatedly stressed that the Paralympics would be salvaged by an emergency bailout of funds from the municipal government of Rio, which has pledged $61-million (all currency Canadian), and from the federal government, which has pledged another $48-million. He said that organizers met in person with Brazil's acting president, Michel Temer, at the Olympic Park on Aug. 18 and that Temer "picked up the phone to get things moving." Rio's mayor, Eduardo Paes, is also determined to give city money to the Paralympics, he said.
Public prosecutors had tried to bar the funds transfer by arguing that Brazilian transparency law bars the government from giving cash to an entity that is not open about its spending. But on Wednesday, Rio2106 succeeded in getting an injunction overturned; it had barred the committee from receiving any public funds until it agreed to open up its books. The organizers have long argued that because Rio2016 is funded, in part, through sponsorships and licensing deals with private companies, it cannot make its finances public.
But an injunction still bars the City of Rio from giving the Paralympics emergency cash: an electoral court has ruled that the payment would violate a law that bars politicians from awarding funds within a year of a municipal election, scheduled for Oct. 2. Paes insisted on Friday that the city would successfully appeal that injunction as well. "We are going to clarify with the Elections Court: Our argument is that this is a commitment made in 2009 when we applied to host the Games," he said. In the bid Rio made for the Games seven years ago, both the state and the municipal governments were listed as guarantors.
Brazil is in the grip of a fierce economic recession, prompting the Temer government to institute an austerity program and slash social transfers, and the state of Rio, where the budget relies heavily on oil revenues, has been hit particularly hard. Schools in Rio have been closed for six months because teachers haven't been paid and went on strike; hospitals are badly understaffed and lack essential supplies; and police, firefighters and paramedics are all getting paid erratically.
But Andrew Parsons, president of the Brazilian Paralympic Committee, said he did not think frustration with the bailout would deter people from attending the Games. "Brazilian society understands that this is not only a sports event but, in a country that has 45 million people with [disabilities], that spending 45-million reals (about $18-million) to change the way they are perceived, and by changing the way they are perceived changing their reality, is not an expenditure, it is an investment," he said.
Brazilians are frustrated about the mammoth corruption scandal engulfing the country, he acknowledged (it includes many companies that had contracts with Rio2016 for the Games). "But this is not misuse of public funding, this is the better use, the best use, of public funding."
Pressed by reporters, Sir Philip would not clarify how it is that Rio2016, with a $3-billion budget overall, urgently needs a cash infusion to keep running. While Rio2016 will not provide a specific accounting for the Paralympics, there are signs that the financial situation is dire: Rio2016 is a month late in sending out travel grants to national Paralympic committees, funds that are meant to be used to fly competitors to Rio and without which teams from small countries in the developing world will not be able to attend.
Ticket sales are a critical source of funds on which organizers were counting, but only 12 per cent of tickets have been sold. "At this point it is difficult for us to expect the full venues that we saw in Beijing or London," Sir Philip said. The number of tickets on offer will now be reduced to 2 million from 3.4 million, Xavier Gonzalez, CEO of the Paralympic committee, said Friday.
The outstanding questions about funds and the planned bailout have triggered plans for more legal action. "I admire and support the event, but the most important thing is the probity," said Marcello Rubioli, a judge with the electoral court in the state of Rio, who said he is consulting with federal legal advisers in Brasilia over whether his court can also bar public funding. "I am deeply sorry about the Paralympics, I'm sympathetic with the event. However, I also feel sorry that the International Paralympic Committee, the International Olympic Committee and City Hall couldn't be professional enough to plan and be prepared for the event. I'm not the bad guy here. Maybe they were just incompetent in their planning."
On Friday the Brazilian newspaper Estadao reported that last year, eight top executives with Rio2016 were being paid an average of $32,000 each per month.
Mario Andrada, spokesperson for Rio2016, insisted that the budget crisis at the Paralympics does not originate with overspending on the Olympics now under way. "There is no such thing as money for the Paralympics being spent on the Olympics," he said. "We are [a] company designed to run both Games and money spent on one is money spent on the other."
With reporting from Elisângela Mendonça