The World Cup and a Lack of Sense of Urgency

Yes, pretty it is, but will it be ready by 2014?
Source: Copa2014.org.br

The never-ending story: The World Cup. There is a current blog entry on veja.com.br, coinciding with this weeks cover story. Veja did a fairly simple, if simplistic calculation: How much has been spent so far, how much time until the World Cup, so when will the stadiums get done?

The answer: All but one will be finished AFTER the World Cup.

Stadium	Budget	Spent to date	Conclusion Run-Rate
Corinthians (SP)	R$ 1bn	Zero	Never
A. das Dunas (RN)	R$ 400m	Zero	Never
A. da Baixada (PR)	R$ 220m	Zero	Never
Maracanã (RJ)	R$ 957m	R$ 26m	2038
Arena Pernambuco	R$ 532m	R$ 60m	2025
Arena Amazônia	R$ 499,5m	R$ 30m	2024
Mineirão (MG)	R$ 666m	R$ 86,6m	2020
Nacional (DF)	R$ 670m	R$ 45m	2021
Arena (MT)	R$ 355m	R$ 48m	2017
Beira Rio (RS)	R$ 290m	R$ 30m	2017
Fonte Nova (GO)	R$ 591m	R$ 99,9m	2015
Castelão (CE)	R$ 519 milhões	R$ 80m	2013 (October)

Source: Veja Magazine

Is this likely? Probably not. Is this possible? At least for a few of the stadiums, it is starting to seem that way. Why so? Well, apart from a Brazilian lack of sense of urgency (which can drive the German author of this blog mad at times), aparently, there have been some problems with planning. The Brasilia stadium, for example, was planned without grass, seats and illumination (so it will cost more). In the Maracana stadium, the construction company found that the concrete structure was rotten only after tearing out the seats (what a surprise, considering the stadium was completed for the 1950 World Cup on the run and probably not much has been invested since - also here, more will be spent... and it will take a wee longer).

The blog is worth a read, and the issue is worth buying, as it also contains a bunch or pretty pictures of what stadiums should not look like three years before the cup... The first part of the solution will probably be to throw so much money at the construction, to get them finished on time. This has worked in the past: The 2007 Pan American Games were suffering from the same problem, until the government decided to "invest" a bit more in the last six months prior to the games. The result: An overspend of R$3.6bn - instead of R$400m, the cost went up to R$4bn. The second part of the solution will be to reduce the amount of venues from twelve to... 8 or less. Bookmark this page. I am betting on the exit of Manaus, Natal and Curitiba - and Sampa will not host the opening game.

Now, the only question (apart from the many above) is: Where will the 2013 Confederations Cup be held? Oh, and let us not talk about airports this time...

P.S. There even is an official (?) site or the Itaquerão (São Paulo Stadium depicted above): http://www.itaquerao.com/  - But the bandwidth has been exceeded... so Error 509 for you...

Now official: Airports will not be ready for the World Cup

Reality today... and in 2014... and in 2016...

The renown (governmental) institute IPEA has now confirmed what most realists have known for a while: The airports will not be ready for the World Cup in 2014. Notable exemptions are Curitiba and Tom Jobim in Rio.

While the Minister for Civil Aviation (a brand new ministry) Wagner Bittencourt still claims that the timeplan is "adequate", he seems to be in denial, ignoring the IPEA data.

Experts have long advocated the privatisation of the airports to ensure that infrastructure grows ahead of (or at least with) deman - but the government remains stubborn that airports remain a national interest and thus must be state operated. Now it is too late...

Of the 13 airports under construction and modernisation, 9 will not be ready by 2014... among these the unimportant Sampa Guarulhos, Salvador and Brasília. And what is worse, these will not be ready for the 2016 olympics (Only Porto Alegre and Belo Horizonte will be) - so do not plan any extensive travel outside of sporting events in 2014 or 2016.

This blog, as one of many sources, has repeatedly highlighted that there is a huge risk of the aiports, most specifically Guarulhos not being ready for the World Cup 2014, nor the Olympics in 2016. And this is not only based on other news sources or what I hear and read. I fly in and out of Guarulhos at least once a month and just recently signs have gone up announcing the modernisation and expansion of the security area and passport controls... Unfortunately, as in many cases, it will take a long time until something starts happening - but the renderings on the posters look nice.

Oh, and to add to the troubles, the Itaquera Stadium in Sampa, which apparently should host matches during the World Cup (if they ever get construction started), will not be ready for the Confederations Cup in 2013.

And I will not even get started on any bullet train discussion - this is just sad.

World Cup Troubles

Let Us Hope there are no second thoughts about this

To make it quick: The 2014 World Cup is in trouble. A report to be released these days (today?) will put a green light on the stadium construction of Belo Horizonte. Full Stop. All other stadiums will receive a yellow light for progress - except for Natal and São Paulo, where construction hasn't even begun. To be honest, I still do not know where and how the São Paulo stadium should be built.

The second part of the bad news is that almost all infrastructure to support the world cup (airports, roads, subway, etc.) will receive at least a yellow light. The "grand plan" for São Paulo is expected to be to block all access roads to and from stadiums and major hotel districts to allow soccer fans to get to and from the games - killing off the rest of the city.

The third part of the bad news is that, contrary to initial official news, almost no private money will be used for infrastructure and stadium construction. The required money is estimated to be a total of ca. 10 billion Euros, of which 7.2 billion Euros alone are for airport infrastructure projects. The available 147m EUR from the private sector are from soccer clubs used to build or refurbish their own stadiums. In other words, the tax payer will pay for 98.5% of the cost. Good job.

The fourth part of the bad news is that the world cup will be in roughly 1200 days.

The fifth and final part is that at least six stadiums with infrastructure need to be ready in 835 days - for the confederations cup...

EDIT AND UPDATE: Since last year, costs for stadium construction have already gone up, on average, by 57% according to AFP. Top cost increases were registered in Salvador, at 170%.

Picture of a country that may stop

The Estado de São Paulo, a major newspaper in São Paulo recently ran an impressively critical article about the infrastructure problem in Brazil. Renée Pereira, the author, highlighted six major points which may lead to what in Brazil is called the apagão, or blackout, highlighted by last Novembers Black-Out which left all of what has economic importance in Brazil without energy for two hours.

This black-out today is mainly pointed at logistics: With Ports, Airports, Roads and Rail at maximum capacity (in many cases over it), any further growth will lead to a gridlock which may then lead to a spiral downwards. Until 2008 this was a problem, but not so much - a combination of the Brazil faith in that "tomorrow" things will improve, a global crisis that took off some strain off the infrastructure for a few months and much slower growth prior to the crisis - made many believe, that things would somehow work out.

1. With Brazil barely dipping into the crisis and now speeding out, infrastructure is the big problem. Investments in ports are long-overdue and some problems are ridiculous: Take that several terminals at the main Santos Port cannot operate during rain, which makes them pretty useless during the heavy rainy season which lasts from end of November to March. 
2. Railways are a further problem - the railway network is at 28.000km - tiny, especially if you compare it to the (albeit well-developed) German network of 34.000km. In addition a large portion of the railway network in operation today is fully privately owned - a large portion belonging to the mining giant Vale, which exclusively uses it to ship iron ore to the (clogged) ports.
3. This puts a great strain on the roads, which transport 60% of all goods in the country today. Many roads, especially outside of the São Paulo area, are in a poor state of conservation and publicly funded - meaning that their state usually deteriorates over time. The poor state of the roads increases the costs of transport by 28% - in some cases the cost of kg/km is higher than in high income countries. Benchmarks I have done between my local logistics suppliers and German examples make it appear as if I were massively overspending on freight.
4. Airports fare not much better. São Paulo Guarulhos airport, the major hub in Brazil has been basically unchanged since the 1990s - but today operates at way over 100% of capacity - over the past 8 years, passengers have gone from 11m to expected 22m this year. With more freight being shipped back and forth and more Brazilians moving into the middle class and thus able to buy a ticket, will probably triple demand in less than 20 years (from todays clogged levels!). Guarulhos is not alone. This interesting statistics on wikipedia show 18 of the 20 major Brazilian near or over their capacity in 2009 (the first post-crisis year!) - in 2010 the situation is much worse. The Rio city airport Santos Dumont has surpassed the total 2009 passanger volume after the first 8 months of operation of this year. If you try to imagine further growth and then throw in a 2014 World Cup and 2016 Olympics, imagine the mayhem...
5. (and 6.) Finally access to energy (each citizen is average of 18h without power per year, 20min per week), water (only 85% have access to clean water) and basic sewage systems (only 58% have access to sewage systems) are also behind necessity, most of this access provided in the major metro areas. Especially the North-East of Brazil often seems like sub-saharan Africa...

Sadly, the author does not propose any solutions - although a mix of the following would surely be of great help: Privatize airports, roads and ports, support PPP in basic infrastructure and plan, plan, plan. Allowing uncontrolled growth, as is still common in São Paulo, ensures that private investors build residential and commercial buildings, factories and other industrial installations, but leave the roads, electricity and water supply to the state, without any form of coordination. In addition, strong public investment in basic infrastructure and the decentralization of all logistics needs from the São Paulo-Santos-Guarulhos triangle would surely give the country some room to breath...