According to state media, last January Beijing’s organizing committee said it had recently applied for permission to issue bonds as one way of financing the 2008 Summer Games, but had been turned down.
The reason? A 1994 Budget Law which states that local governments are not allowed to issue bonds.
A Beijing municipal planner said, “all I know is that for now we are not allowed to issue Olympic bonds”.
Total investment in related construction projects is now budgeted at about 300 billion yuan ($36 billion U.S.), up from 130 billion yuan in July, when Beijing won the right to host the Games. The central government can be expected to pay for some of the costs, but at least 180 billion yuan will have to come from the city, said state media.
The newspaper did not give an amount for the size of the bond issue that Olympic planners have in mind.
According to the newspaper, Beijing officials said it might be possible to circumvent the Budget Law by issuing the bonds not directly in the name of the Beijing city government, but rather as “special Olympic bonds”.
Others think an amendment to the Budget Law would be needed before a bond sale could go ahead, which would mean involving the National People’s Congress, or parliament.
