Thoughts on cancellation of Brasilia Indy 300

January 31, 2015 by

Yesterday, the Brazilia Indy 300 race was cancelled by government officials in Brazil.  Unfortunately, the news of the cancellation hit the newsstands before the IndyCar series was notified.

Underlying the cancellation is the precarious financial condition of Brasilia, the capital of Brazil.   Some public employees aren’t being paid.  The cost of rebuilding the Autodromo Internacional Nelson Piquet racetrack, estimated at $100 million, is considered to be too expensive.

I suspect also underlying the decision is the experience of the building of the Estadio Nacional (Brazil’s national soccer stadium).  When the decision to rebuild the stadium was made, the costs were estimated at $300 million.  Total cost when the stadium was completed was $900 million.  The actual costs were 3x the original estimate.  The Tribunal de Contas (the Court of Audit) has projected that it will take over 1,000 years to repay the debt.  The economic useful life of the stadium is only 25 years.

There were riots and protests over the cost of the Estadio Nacional while it was under construction.  Pair that with public employees not being paid and the stage is set for mass protest.  As a public official, it is hard to support a sporting facility being built while citizens are suffering.

With the racetrack nearing the completion of its renovations, whatever monies have been spent are down the drain.  There will be no recouping of the monies spent.  Brazilia had hoped to attract not only IndyCar to the updated racetrack but also F-1 and MotoGP.

IndyCar learned from the lessons of the 2012 cancellation of the race in China and purchased insurance.  It is unfortunate that the race has been cancelled but the decision is made.

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