Olympics may draw $34 bln in investments to Rio
Rio de Janeiro: Rio can expect about 53.2 billion reais (USD 34 billion) in private investments linked to the World Cup and Olympic Games, outstripping the funding attracted by other recent host cities, a study showed.
The report by professional services firm PwC said the biggest investments and job creation would come in infrastructure and tourism as the Brazilian beach-side city prepares to host the two massive sports events in 2014 and 2016 respectively.
By comparison, Barcelona drew investments of about $8 billion for its 1992 Olympic Games and Sydney attracted USD 9.7 billion in 2000, the study said.
"It`s going to be bigger than in other cities," Hazem Galal, global leader for cities and local government with PwC, said after a panel debate on Olympic investment opportunities in Rio on Tuesday.
"The lack of infrastructure investment in the past in Brazil and Rio has left a need for investment and raises the chance to redefine some sectors such as tourism."
Despite Brazil`s famous beaches and warm weather, only about 5 million foreign tourists visit the vast country each year, compared with 8 million who visit tiny Dubai, he said. The double-header of sports events is expected to help nearly double annual foreign visitors to Rio -- which is already suffering from a shortage of hotel capacity -- to 4 million by 2016, the study predicted.
Overall, the events should generate more than 90,000 jobs in Rio, including 35,400 permanent positions, it said.
The study comes as Brazil struggles to overcome bureaucratic and logistical obstacles that are delaying the needed expansion of its airports and the construction of stadiums ahead of the World Cup.
An auction for rights to build a bullet train between Rio and Sao Paulo failed to attract any bids on Monday, casting major doubts on the government`s flagship infrastructure project ahead of the 2016 Games.
"I think we`re at a critical moment and that political decisions have to be taken quickly and decisively," Galal said.
Participants on the panel said the events would give Rio a huge opportunity to strengthen its brand and attract companies to base their operations in the city. Michael Charlton, the former head of London investment promotion agency Think London, gave the examples of leading brands Adidas and Omega that were encouraged by London`s 2012 Olympics to set up regional headquarters in the city.
"The ability to use both the World Cup and Olympics as a platform to enhance brand awareness of what`s happening in Rio and in Brazil is just amazing," said Charlton, who is now international director for Rio promotion agency Rio Negocios.
"The scale of understanding globally about what`s happening in Rio is still very low."