Rio Declares State of Public Calamity Over Financial Crisis and the Olympics

06/17/2016 - 20h12

The government of Rio de Janeiro declared on Friday (17) state of public calamity due to the financial crisis faced by the State.

Among the reasons given by the acting governor, Francisco Dornelles (PP), are the commitments to fund the Olympics, which starts in August.

The decree, published in the "Diário Oficial" (official journal), does not make clear the implications of the measure.

Similar acts in the event of disasters allow the awarding of contracts without bidding. The text states that "the competent authorities shall issue normative acts necessary for the regulation of the state of public calamity, in order for the Olympics [to take place]".

The government says in the text that the serious financial crisis "has prevented the State from honoring its commitments to the realization of the Olympic Games." The construction of the metro line 4, which is essential for the transport of fans during the event, is at risk of not being completed for the Games.

In the decree, Dornelles said that the crisis "may lead to the total collapse of public security, health, education, mobility and environmental management."

The governor said that foreign delegations begin arriving this month to Rio to acclimatize for the Olympic Games.

The State delayed for the second time the payment of part of salaries of civil servants this month. The crisis has led to the closure of emergency departments in hospitals and the reduction of equipment in police stations.

For the Olympics, the State is having difficulties to get funds to complete the metro line 4. The government needs R$ 500 million (US$ 146 million) to finish the stretch and cannot get new loans for being in default on international credit operations.

The estimated deficit in the budget for this year is R$ 19 billion (US$ 5.6 billion).

Translated by MARINA DELLA VALLE

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