— Published 24 May 2022

Inflation, the new fear of Paris 2024

The budget. Inflation. With just under 800 days to go before the Paris 2024 Games, these two words are invading the preparations for the Olympic and Paralympic event without being invited. And they could well become part of it.

One after the other, two of the main players in the Games have raised the risk of soaring prices. Both cited the “international context” to justify their fears.

Tony Estanguet spoke first. The president of the Paris 2024 OCOG spoke by video on Friday 22 May, during the last day of the IOC session held in hybrid mode from Lausanne.

I would like to share with you an important challenge that will take us into the second half of 2022: the budget,” he explained to the members of the Olympic body. The succession of health, economic and geopolitical crises that have been going on for more than two years now are creating new risks for Paris 2024. The COVID crisis and the conflict in Ukraine have created disruptions in the production and supply chains. They have also generated an inflationary context that was still impossible to anticipate just a few months ago.”

Tony Estanguet makes no secret of the fact that cost control, which has been a priority since the creation of the organising committee, is becoming a high-precision exercise. But the three-time Olympic champion is not giving up. In front of the IOC, he assured them that the initial ambition of proposing a “spectacular, popular and sustainable” model for the Games was still valid.

The project will remain “unique”. But Tony Estanguet warned that it would be necessary to go “even further in optimising and saving money behind the scenes of the Games”. How can this be done? By working with the IOC to find the “necessary adaptations” to compensate for an inflation rate of between 5 and 8% between 2022 and 2024.

The OCOG’s budget, still set at 3.9 billion euros, will be revised before the end of 2022. To stay on course, the OCOG will no doubt have to make cuts in the least essential expenses. The “backstage of the Games”, as Tony Estanguet calls it. The “decorum”, as Guy Drut, one of the four French members of the IOC, likes to call it.

Another warning: the constructions. Nicolas Ferrand, the director general of SOLIDEO (Société de livraison des ouvrages olympiques), took advantage of a visit to the construction site of the athletes’ village in Seine-Saint-Denis on Monday 23 May to mention the danger of inflation.

The Frenchman acknowledged that the surge in cases of COVID-19 in China and the conflict in Ukraine will not be painless when it comes to opening the books. With the inflation of raw materials in the building and construction sector, more will have to be paid.

SOLIDEO inherited an initial budget of 3.2 billion euros. This was revised last year to 4 billion. The government’s contribution was increased by 175 million euros, from 1.38 billion to 1.55 billion euros.

Nicolas Ferrand assures: “We will keep our commitments. But the SOLIDEO boss confided on Monday 23 May that he had had “cold sweats, from March to mid-April”, when the builders admitted that they no longer had visibility on the availability of materials, particularly steel, wood and locksmithing.

With one of the builders, the suppliers denounced the contracts,” explained Nicolas Ferrand. But for the past three weeks, the message has been that we will not have any supply problems until the end of the year.

At the end of March, SOLIDEO considered changing its plans and using substitute products for some materials. But this option was abandoned when the uncertainty over supplies was cleared up.

No worries, then, at least about the timetable. The Olympic Village, built in the municipalities of Saint-Denis, Saint-Ouen and Ile-Saint-Denis, will be completed by the end of 2023. SOLIDEO will hand over the keys to the OCOG in February 2024.

The construction site is currently running five days a week, with occasional Saturdays until 3pm. There are no plans to speed up the pace and resort to Sunday work.