IOC’s John Coates says Rio Olympics process is working well

A Rio 2016 sporting venue in Rio de Janeiro, Brazil.

The latest update from Rio on its Olympic Games preparations ­delivered the startling news that power and water had been cut off to the Games’ centrepiece stadium because of non-payment of $320,000 in utility bills.

The Estadio Olimpico Joao Havelange will host athletics competition and football matches during the Games in August, provided the dispute over who is paying the bills is resolved between the city government and the stadium tenant, Botafogo football club.

The stadium, constructed eight years ago, already had a chequered history. It was closed for two years in 2013 when its roof was found to be in danger of collapse and ­requiring urgent repairs.

This is the kind of issue that has been sent to try the organisers of the first Olympic Games to be held in South America.

That would have been challenge enough for a developing ­nation such as Brazil without what Rio 2016 spokesman Mario ­Andrada describes as the “perfect storm’’ of economic and political crises that have engulfed the Games.

In the face of a deep economic recession and soaring inflation, the Games organisers have cut, cut, cut expenditure as they prepare for what may become known as the Austerity Games.

The budget for the Rio Games is divided into three sections. There is a $4.2 billion Games operating budget, a $5bn venue construction budget and a $14.2bn public infrastructure budget. The funds for venues and public infrastructure have been provided by government or through private-public partnerships.

In a report on December 30, the organising committee announced the Barra Olympic Park (which will host 16 sports in nine venues) was 95 per cent complete.

It is the privately funded operating budget that remains most fluid at this stage.

However, that is underpinned by the International Olympic Committee, which will contribute $2.1bn from its television rights and sponsorship revenue.

Beyond the IOC’s contribution, Rio 2016 forecasts that 40 per cent of its revenue will come from local sponsors (already on board), 16 per cent from ticket sales (going well) and 7 per cent from licensing (and other revenues).

The revenue is there as long as the spending is reined in. The IOC set up a working group last month to help the organisers identify spending cuts that would not affect the integrity of the competi­tion or the experience of athletes or spectators at the Games.

IOC vice-president John Coates, the mastermind of the Sydney Olympics, says that process is working well.

“This is a very challenging time for Brazil, but fortunately for us the construction program has done very well in the last two years,’’ he says. “Most of the venues are now complete and we’re satisfied the Metro project will be completed, but they still have to make the ­operating budget balance.

“The working group is looking at the level of services the organising committee was asked to provide and some of that was a bit out of hand.’’

Items to be scaled back include TVs, printers and outdoor furniture in the athletes village (air-conditioning was reconsidered but will be included), cars and drivers available to teams, and gourmet food and luxury cars provided for VIPS.

“I think that level of service will become the norm for the future because we want to make the Games more sustainable,’’ Coates says.

The volunteer force has been reduced from 70,000 to 60,000 and volunteers will have to pay for their own accommodation. Paid staff numbers have been cut by 500 to 4500.

The outlay on test event infrastructure has been slashed, and Rio will spend just 10 per cent of the 2012 London budget for the opening ceremony.

Coates, who gave the Rio organisers “a touch up’’ in 2014 about their tardy preparations, is now pleased with their progress.

“I am feeling very positive about these Games now,’’ he says.

“We are going to get out of this very well.’’