Sion’s 2026 Olympic and Paralympic Games bid is considering an insurance plan to protect taxpayers from any potential cost overruns incurred should the Swiss city win the right to host the Games.
Bid Vice President Frédéric Favre said Thursday that discussions were underway with several partners to negotiate insurance against any potential financial deficits while organizing the Games.
The International Olympic Committee (IOC) plans to contribute USD $925 million towards the organization of the Games, but it generally requires an accountable government to guarantee the total delivery costs of the the Games. While organizing committee budgets are typically close to balanced, infrastructure costs tend to balloon ahead of the Games.
The Swiss bid has set an initial budget forecast of CHF 2.4 billion (USD $2.4 billion) for the project that will spread across several cantons.
Last year IOC Executive Director Christophe Dubi told Sion 2026 Executives in a letter that a full guarantee may not be necessary for the bid, depending on the financial plans that are presented during the bid phase.
“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.”
The committee is working on a model to submit to the IOC when guarantees are due early in 2019. Favre wouldn’t elaborate on the possible cost of purchasing the insurance.
Los Angeles’ 2028 Olympic organizing committee proposed to protect its bid with an insurance plan costing about USD $150 million, along with a $400 million contingency in its budget. Beyond that, the city and the State of California would each kick in $250 million to protect the bottom line.
Sion’s bid faces a canton-wide referendum on June 10 amid low public support polling. A further national vote may also be required.
Sion is competing among six other bidders including Calgary in Canada, Erzurum in Turkey, Graz in Austria, Sapporo in Japan, Stockholm in Sweden and either Cortina d’Ampezzo, Milan or Turin in Italy.
The IOC will elect a winner at its Session in September 2019.