THE TIMES/RACONTEUR: Brazil: Greek sports and Greek gifts.

When “King” Pelé turned 70 on October 21, his old team Santos decided to stage a valedictory match for its prodigal son. All was going swimmingly at the break with the home team enjoying a two-nil lead. But then the away side staged a three goal comeback. “We gave a Greek gift to Pelé,” the shamefaced captain admitted. 

The danger for Brazil is that the two huge sporting events it has won the right to hold – the World Cup in 2014 and Rio Olympics in 2016 – could prove just as unwelcome. They will no doubt prove spectacular, but questions are mounting over infrastructure needs and the legacy. The one given is a huge bill. The Cup is forecast to cost the public sector a splash over R$17 billion and the Olympics close to R$29 billion and that’s probably just the start: Brazil is a champion at cost over-runs.

The Cup is complex and will be spread between 12 cities in Brazil. Rio de Janeiro and São Paulo maybe global household names, but most of the cities are unknown outside Brazil and one or two – such as the western cowboy town of Cuiabá, near the Bolivian border-- most Brazilians would be hard placed to locate.

Logistics problems are not just confined to building or tarting up stadia but expanding and re-building outdated airports. Hurtling around from stadium to stadium by road is just about possible in South Africa, not in Brazil: Fortaleza is 4,242 kilometres from fellow host city Porto Alegre. The logical route, the BR-020 highway, is not fully asphalted and parts wash away in the rainy season.

The Olympics is just as big a challenge with Rio taking the baton from London in 2016. The Marvellous City has set out a beautiful site by the water and the city is fast improving its reputation as mineral and oil wealth drive the local economy. Yet, Rio has a chequered record on hosting big events and is still trying to live down the legacy of the Pan American games of 2007. The then state government over-spent the initial budget four times and extensions to the Rio metro and a clean-up of the Bay of Guanabara were never achieved.

It’s no surprise that experts question such extravagant spending in a poor country with patchy basic services. An economist at the Federal Economic Council in Brasília, who preferred anonymity, notes Cuiaba is investing some R$1.2 billion for the Cup. Yet some 60% of the city is not connected to the sewer mains and 20% has no running water, he points out. He predicts just 5,000-10,000 foreign tourists will be attracted to visit the remote city.

Away from sports, the big story is the huge petroleum discoveries off the south-east coast, which national champion Petrobras is set to develop. The company plans to spend a staggering $224 billion between this year and 2014 in developing fields that are buried beneath layers of salt. The oil may transform Brazil into one of the biggest players in the world, but it’s a gamble because extraction costs are high as the finds are so inaccessible.

These sporting and oil and gas projects are absorbing a significant portion of government time and energy, leaving little space to get more humdrum projects off the ground. An ambitious national infrastructure project has proven frustratingly slow in realizing investments. At the same time, rapid economic growth, estimated by most economists at more than 7% this year, is putting pressure on over-stretched infrastructure. Brazil’s energy supply continues to be too dependent on hydro power. Roads, rail, ports and airports are inadequate and Brazil continues to lag in education and health indicators.

With low historical investments in infrastructure, Brazil has the tricky task of squaring up to spend R$161 billion per year to get its infrastructure up to scratch, according to the Brazilian Infrastructure and Basic Industries Association. A new government, slated to take over in the New Year, has its work cut out.

World Cup Estimated Costs, Private and Public Sector Investments

City, State

Cost

Manaus, Amazonas

R$1.5 billion

Fortaleza, Ceará

R$9.4 billion

Natal, Rio Grande do Norte

R$3 billion

Recife, Pernambuco

R$1.6 billion

Salvador, Bahia

R$1 billion

Cuiabá, Mato Grosso

R$3 billion

Brasília, Federal District

R$600 million

Belo Horizonte, Minas Gerais

R$1.5 billion

Rio de Janeiro, Rio de Janeiro

R$5.9 billion

São Paulo, São Paulo

R$36.4 billion (includes metro upgrades and airport train)

Curitiba, Paraná

R$4.5 billion

Porto Alegre, Rio Grande do Sul

R$6 billion

Total

R$75.4 billion

Source: Globo

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