Olympic bid cities must show financial backing

Posted Feb. 15, 2012, at 7:34 p.m.

LONDON — Now that the Italian government has pulled the plug at the last minute on Rome’s Olympic bid, five remaining candidate cities must prove that they have the financial and political muscle to win the high-stakes race for the 2020 Games.

Italian Premier Mario Monti’s refusal to provide financial support for Rome’s bid Tuesday ended the Eternal City’s hopes of bringing the Olympics back to the capital for the first time since 1960.

Monti said it would be an irresponsible use of taxpayers’ money to fund the $12.5 billion Olympic project. Rome was the first city to declare its 2020 candidacy a year ago but, without the necessary financial guarantees, the effort came to a sudden halt a day before the deadline for submission of bid files.

Among other things, the International Olympic Committee requires bid cities to provide guarantees that their governments will cover any deficit.

“We have to insist on these guarantees,” IOC executive board member and finance commission chairman Richard Carrion told The Associated Press on Wednesday. “It’s prudent from our point of view to insist on the support of governments.

“Obviously, for the remaining cities they have one less competitor to worry about. Rome would have been a formidable competitor.”

Five cities are left in the running: Madrid, Tokyo, Istanbul, Doha, and Baku, Azerbaijan.

The IOC will review the files before the executive board decides in May whether to accept all five cities or pare the field. With six contenders, the IOC would likely have cut at least one. With five, the IOC could keep them all.

“I don’t think all of them will go to the final, maybe only three, maybe four,” IOC marketing commission chairman Gerhard Heiberg told the AP. “But five is excellent. All five are capable of hosting the games.”

The full IOC will select the host city in Buenos Aires in September 2013.

It made fiscal and political sense for Monti to say “no” to Rome at a time of austerity and spending cuts. Italy doesn’t want to go the way of Greece, which is crippled by debts and looking for a second bailout from Europe. Some of Greece’s problems have been blamed on overspending for the 2004 Athens Olympics.

The public sector budget for this year’s London Olympics is $14.6 billion, nearly three times the figure estimated during the bidding phase.

Rome could be back to bid for the 2024 Olympics, but the race might be more competitive then. If the U.S. resolves its long-running revenue dispute with the IOC, the field could include an American city, along with Paris and a candidate from South Africa.

Italy’s decision raised questions about why Spain had continued to push ahead with Madrid’s candidacy despite the country’s own severe economic troubles. Spanish officials say the Olympics could act as a catalyst, rather than a drain, for economic recovery.

“The president of the country has said they are moving ahead. We have to take them at their word,” Carrion said in a telephone interview. “I think they’re in for the long haul.”

Economic issues will be scrutinized closely during the bid race. Japan’s economy has also weakened, Turkey has a growing economy, Qatar is rich from vast oil and natural gas reserves, and the former Soviet republic of Azerbaijan also is flush with natural gas revenues.

The Istanbul bid would seem to have the most going for it. The city is bidding for a fifth time after failed attempts for the Olympics of 2000, 2004, 2008 and 2012.

The IOC often rewards cities for persistence, as shown last year by the decision to award the 2018 Winter Games to Pyeongchang on the South Korean city’s third consecutive try.

The IOC has also displayed a trend of going to new regions, sending the winter games to Russia for the first time (Sochi in 2014) and giving South America its first Olympics (Rio de Janeiro in 2016).

Istanbul, Doha and Baku — the long shot — all represent potential new Olympic sites.

“Where else in the world can you have the Olympic Games not just in one city but on two continents?” senior Istanbul bid official Hasan Arat told the AP.

The Istanbul delegation delivered its bid files to the IOC in Lausanne on Wednesday, the final day for submissions.

“This is a new concept; this is a new Turkey,” Arat said. “Turkey is growing very fast. We are the fastest growing economy in Europe, and we are the 16th largest economy in the world.”

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