Confusion over Aggreko’s Rio Olympics Tender

Confusion surrounds the tender from Glasgow-based temporary power supplier Aggreko to provide generators to the Olympics in Rio de Janeiro next year.

Reuters reported that a spokesman for Rio 2016 said Aggreko had pulled out of its tender to provide the Olympics with generators in a major blow to the event as organizers rush to secure an energy source.

However, Aggreko issued a Regulatory News Service statement, saying: “Aggreko notes media reports that it has withdrawn from the bidding process for the 2016 Rio de Janeiro Olympic and Paralympic Games.

“The tender process is ongoing and as such Aggreko is unable to comment further at this stage.”

Insiders said Aggreko got fed up with negotiations that had dragged on for two years as Rio Olympics organizers look for savings to stay within their $1.9 billion budget.

Two other sources with knowledge of the tender said they questioned whether another temporary power supplier had the in-country capacity and Olympic experience to meet the needs of the contract, Reuters reported.

The sources said the winner of the contract would probably have to lease generators from Aggreko.

Aggreko has been involved in nine Olympics and six World Cups and the loss of the Rio contract could have an impact on the company’s 2016 earnings.

Aggreko’s involvement in the London Olympics in 2012 was worth almost $60 million.

Rio 2016 spokesman Mario Andrada told Reuters he was comfortable with the companies still competing for the tender.

But Will Kirkness, an industry analyst at Jefferies, told Reuters: “There is increased risk of going somewhere who doesn’t have the experience. Are there people out there with enough equipment? Probably. But in terms of the operational side of things, Aggreko are pretty good at this.”

Analysts said Caterpillar could be one of the firms still in the running for the contract.

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.