The International Olympic Committee (IOC) has confirmed that the Sion 2026 Olympic and Paralympic Games bid will not be required to provide an unlimited deficit guarantee to cover any budget shortfall by the organizing committee (OCOG).
Bids for past Games have required extensive guarantees of the OCOG budget, usually underwritten by the appropriate government, to protect the IOC from any budgetary issues. But due to the Olympic Agenda 2020 road map and the “extra flexibility” it affords, Sion need only provide “limited warranty coverage.”
Sion 2026 proclaimed this development as “good news” for the bid on its Facebook page Tuesday.
IOC Executive Director Christophe Dubi summarized the decision in a letter to Sion 2026 President Jean-Philippe Rochat Friday.
“The IOC does not impose any requirements on the amount of the deficit guarantee and will therefore accept, as part of an application, limited warranty coverage,” the letter, written in French, said.
“The objective of the OCOG’s prospective budget deficit guarantee is to ensure that the organizers will be able to keep all their financial commitments during the organization and delivery of the 2026 Olympic and Paralympic Games.”
Dubi, in the letter, went on to explain that bid documents and financial statements will be fully vetted during the application stage to ensure that they are “credible and strong enough to warrant a limited deficit guarantee.”
He also explained that the “Games Management 2020” program has introduced almost 200 new efficiencies that will help reduce the cost of organizing the Games, and reduce the risk.
“It is important to emphasize that the operational budgets of the last editions of the Olympic Games were either in surplus or balanced.”
Venue and infrastructure guarantees are contained under a separate category in the candidate questionnaire file, and those projects are typically fraught with ballooning costs and modified scopes. Low construction estimates resulted in the total budget for the Sochi 2014 Winter Games famously reaching USD $51 billion. The IOC still requires guarantees against those costs.
Sion has proposed a project with very little construction using mostly existing venues to help alleviate those associated risks.
It has not been made clear whether the limited guarantee option will also be extended to the other 2026 bids, though it would seem likely that those cities providing credible financial statements will be treated equally. The IOC Executive Board under the advisement of the 2026 Evaluation Commission will recommend which cities will move forward into the Candidature Phase next October.
Earlier this month Innsbruck in Austria was eliminated as an early contender in the 2026 race after narrowly losing a bid referendum. A bid from Stockholm, Sweden is still seeking government support while a project from Calgary in Canada needs the go-ahead from a newly elected City Council.
Salt Lake City, Denver and Reno-Tahoe are among cities that the United States Olympic Committee (USOC) has identified as potential bidders.
A possible bid from Sapporo, Japan has entered discussions with the IOC while interest has been voiced by Erzurum in Turkey, Telemark in Norway and 2022 runner-up bid Almaty in Kazakhstan.
Sion’s bid still needs Parliamentary approval and will face a public referendum next fall.
A winner will be elected September 2019 in Milan, Italy.