Brazil's Olympic Push Isn't Winning Any Medals the Nation Plans to Spend More Than $1 Trillion This Decade to Update Its Woeful Airports, Roads and Stadiums
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SPECIAL REPORT REUTERS/ RICARDO MORAES BRAZIL'S OLYMPIC PUSH ISN'T WINNING ANY MEDALS The nation plans to spend more than $1 trillion this decade to update its woeful airports, roads and stadiums. But the plans are unraveling. BY BRIAN WINTER liquid starts to seep out of a nearby men's think that a country like Brazil would have SAO PAULO, MARCH 27 room. fixed this by now." "Oh, Jesus!" Curie exclaims, scrambling Indeed, scenes like this are supposed to T'S 8 P.M. at Sao Paulo'S sublimely to his feet. He checks the seat of his suit become a thing of the past here. Brazil plans overcrowded international airport and pants for stains -- nothing. more than $1 trillion in construction projects MarvinI Curie, seeing all the chairs around "I hate this place," sighs the U.S. this decade to bring its woeful airports, him taken, decides to join dozens of other pharmaceutical executive, gesturing at the roads and other infrastructure up to date business travelers and sit on the floor. peeling paint, the flickering fluorescent -- an ambitious building boom that will Until, that is, a coffee-colored mystery lights and, above all, the crowds. "You'd prepare the country to host the 2014 World MARCH 2011 BRAZIL INFRASTRUCTURE MARCH 2011 TRAVEL NIGHTMARE: Scenes inside Guarulhos Airport in Sao Paulo March 4, 2011. REUTERS/NACHO DOCE Cup and 2016 Olympics, provide a bonanza of opportunities for foreign investors, and “pEOPLE ARE FINALLY secure Brazil's place among the world's most STARTING TO REALIZE dynamic emerging economies. That's the dream, anyway. THAT WE'RE RUNNING In reality, expectations are coming OUT OF TIME. ” unraveled -- fast. Brazil's grand infrastructure plans now seem likely to fall well short expectations are too high for emerging of President Dilma Rousseff's ambitions, market democracies generally, including according to a Reuters investigation of major India, South Africa and others, as they try to building projects and interviews with nearly keep pace with demand from their booming two dozen senior political leaders, investors, middle classes but lack China's ability to government watchdog groups and others. implement rapid, authoritarian solutions. Even Rousseff's top aides are starting to So many big projects are currently behind voice doubts. schedule that Pele, the Brazilian soccer "We need to begin to control people's legend, warned in February that Brazil risks expectations," said Sports Minister Orlando "embarrassing itself" during the World Cup. Silva, who is overseeing preparations for the The stadium that would host the World Cup and Olympics. "The idea that we tournament's opening match in Sao Paulo GROUNDED: A passenger rests on luggage cart were going to make up for 30 years without hasn't even had its groundbreaking yet, at Guarulhos Airport in Sao Paulo March 4, 2011. investment in infrastructure in just four years resulting in a public spat with FIFA, the world REUTERS/NACHO DOCE was probably never realistic." soccer body. But that's merely the most Numerous high-profile projects are falling visible problem. Pele and others say that furious last-minute effort to untangle the victim to a long list of problems including road and air traffic, communications grids legal and regulatory issues -- and, often, endemic corruption, red tape, insufficient and other systems could simply collapse the mental blocks -- that are preventing funds and -- above all -- a glaring lack of under the weight of extra demand during the progress. leadership and know-how. Cup unless progress is made at a pace that It's not going all that well. By some independent estimates, fewer Brazil has, so far, not shown it's capable of. "People are finally starting to realize that than half of the major projects planned Silva hears the warnings, and he's we're running out of time ... that we need to nationwide will be done on time. concerned. The lone cabinet member from do more, faster," Silva said. "But resources Unless Rousseff and other officials act Brazil's Communist Party has found himself are scarce. And the work is difficult." quickly to overcome the obstacles, investors in the unlikely position of being one of the As if to illustrate his point, during an may need to rethink some of their rosier nation's biggest cheerleaders for private interview in a Sao Paulo restaurant, Silva long-term economic forecasts for Brazil. The investment, barnstorming the country and spotted a senator from the northeastern delays also raise questions about whether meeting with governors and mayors in a state of Ceara whom he had seen the day 2 BRAZIL INFRASTRUCTURE MARCH 2011 “PeoPLE AREN'T DISCUSSING IT PUBLICly, mayBE BECause Brazilians PREFER to BE OPtimistic . ” FIXER UPPER: Brazil's famous Maracana Stadium in Rio de Janeiro is due to host World Cup matches, but FIFA President Sepp Blatter questioned in March whether a renovation would be ready in time. An aerial view of the renovations of Maracana Stadium in Rio de Janeiro March 3, 2011. REUTERS/RICARDO MORAES before at a particularly contentious meeting for World Cup preparations. Brazil’s booming air travel industry "So," said Senator Inacio Arruda, smiling mischievously, "are we going to be have a Air passengers in Brazil have more than doubled since 2003. Cup or not?" Flow of domestic and international passengers through Brazil’s airports – millions "Are you worried?" Silva asked. 160 "You're making us worry." 140 "Everything will work out," Silva replied, clasping him on the back. "But we're going 120 118.1% to need help." 100 Silva may yet be proven right. But the real dilemma for Brazil boils down to this: If 80 it's so hard to get a new stadium or airport 60 built before the World Cup when the whole world is watching, then what will happen to 40 the projects that really matter? That is, what 17/03/1 20 about the ports, refineries and railways that 1 are crucial to Brazil resolving the bottlenecks 0 2003 2004 2005 2006 2007 2008 2009 2010 that stand between it and developed-nation status in the next decade? Source: Brazil's state-run airports administrator INFRAERO "People aren't discussing it publicly, maybe Reuters graphic/Stephen Culp because Brazilians prefer to be optimistic ... (but) the truth is that we are seeing an which has built hydroelectric dams and other STUCK AT LATIN AMERICA'S important change in expectations," said Andre major infrastructure projects here. WORST AIRPORT Glogowsky, president of Hochtief Brazil, one "There are just so many barriers." NO CASE ENCapsulates THOSE barriers of the country's largest construction firms, better than the jam-packed, hard-to-reach, 3 CONTEXT Brazil’s PAC infrastructure investment program, which includes nearly $1 trillion in planned outlays, involves the construction of large dams, ports and roads, as the country prepares for the World Cup and Olympics BRAZIL INFRASTRUCTURE MARCH 2011 BRAZIL’S INFRASTRUCTURE PROGRAM Highlights from Brazil’s PAC infrastructure plan, which contains most of the planned upgrades to transport and energy systems in the coming years Find more Reuters special reports at our blog The Deep End here: http://link.reuters.com/heq72q Major refurbishing of Building of the the Fortaleza airport 1980s-era time warp that is Sao Paulo's Tucurui power- international airport -- popularly known as transmission line to Guarulhos. improve the Natal Congestion inside and outside Guarulhos national grid Expanding of the Sao Francisco river to is so bad that visitors to Brazil's business secure water resources for more than 12 capital are advised to leave for the airport at million people in the region Recife least five hours before their flight departs. Building of the Porteiras hydroelectric Those who successfully navigate the 15-mile plant as part of a $72 bln plan for new (25 km) trip, which is only possible by car, are hydro plants across the country Salvador greeted by chaotic, shifting lines that snake through the main terminal; signs in the Upgrade of the BR-319 highway as part of $31 Cuiaba bathrooms warning of petty thieves; and, of bln plan to improve the Brasilia About $187 mln course, the occasional pool of sludge leaking road network will be invested out of the pipes. in port revitalisation and Guarulhos was ranked "hands down" Building of the Jonas BRAZIL Belo the worst among 26 major airports in Latin Pinheiro irrigation the Olympic Horizonte Village in Rio de America in a survey of business travelers system in the key state of Mato Grosso Sao Janeiro published in February by Latin Trade Paulo magazine. Construction of Improving the Paraguay Curitiba The overcrowding is, like so many waterway to boost water a $19-bln bullet bottlenecks in Brazil, partly a product of transportation in the area Expanding train between its stunning economic growth. Passenger Porto Alegre the Santos Rio de Janeiro traffic nationally has doubled in the last Dredging of canals and port, the and Sao Paulo construction of quays at country’s seven years, and grew 21 percent in 2010, as largest millions of Brazilians joined the middle class the Rio Grande port and flew for the first time. Yet there are other, more sordid 2014 FIFA World Cup venues 2016 Olympic venues explanations as well. Sources: Government of Brazil, Reuters The government agency that operates Brazil's airports, Infraero, has long been one of the country's most dysfunctional monitors government accounts. Brazil, was that the World Cup and Olympics organizations. As many as a third of Infraero's A major reason why: Employees in would provide an iron-clad excuse for the engineers are currently suspended from their Infraero's rank and file often refuse to sign country to get its act together -- not just for normal jobs because of suspected corruption procurement contracts because so many of the sake of the sporting events, but for the or other irregularities, three sources with their colleagues have been prosecuted in long-term good of a country where traffic direct knowledge of the agency told Reuters.