Brazil Protests Take Aim at Billionaire Batista’s Stadium Lease

Protesters who have paralyzed Brazil’s cities for the past three weeks are being joined by a group taking aim at billionaire Eike Batista as they try to upstage this weekend’s final of soccer’s Confederations Cup.

Batista holds a minority stake in the consortium that was awarded last month a 35-year contract to operate Rio de Janeiro’s Maracana stadium, site of the June 30 final match between Brazil and world champion Spain.

The two-week tournament has been magnifying demands for better public services as Brazil spends 30 billion reais ($13.4 billion) on stadiums and related projects ahead of next year’s World Cup. While protests have waned since 1 million Brazilians took to the streets June 20, authorities in Rio are beefing up security outside the stadium for Sunday’s game in anticipation of a march that at least 18,000 people signed up to attend on Facebook. Among their demands: revoking the lease of Maracana, which they argue is illegal and doesn’t benefit taxpayers.

“The game was rigged from the start, and we knew who was going to win” the auction, Renato Consentino, a leader of the Popular Committee for the World Cup and Olympics, one of the organizers of the protest, said in an interview in Rio. “It was a farce -- Eike’s IMX company presented the project, did the financial viability analysis and then won.”

A consortium led by Odebrecht SA, Brazil’s largest builder, offered to pay 5.5 million reais annually to Rio’s state government to manage the near 79,000-seat Maracana, which reopened this month after a three-year, $500 million renovation.

Criticism

While IMX has just a 5 percent stake in the consortium, it’s been the focus of criticism because the company, a joint venture with IMG Worldwide Inc., first pitched the state on leasing the facility and then was hired to carry out the financial viability study. Batista is also a friend of Rio Governor Sergio Cabral, himself a target of the anti-corruption movement that’s swept across the country.

IMX, when asked about protesters’ charges that the privatization process lacked transparency, responded that it has followed all laws, the company said in an e-mailed statement. Consorcio Maracana SA declined to comment, referring questions to the state government, which said the leasing process has concluded.

FIFA’s Confederations Cup was supposed to be a dry run for next year’s World Cup. Instead, it’s been re-baptized the “Demonstrations Cup” in placards and chants as protesters criticize money spent on stadiums in a nation where 21 percent of the population lives below the poverty line.

Turning Violent

Protests took place ahead of almost every match, sometimes turning violent. In Belo Horizonte, a 21-year-old died of head injuries June 27 after falling from an overpass as police fired tear gas and rubber bullets on a crowd of 50,000 demonstrators outside the stadium where a semifinal match was taking place between Brazil and Uruguay. Protesters last night blocked the highway leading to Sao Paulo’s international airport

To maintain calm, authorities will dispatch 6,000 security officials to the Maracana area for the final, where Brazil will be seeking it’s third straight Confederations Cup championship. Police will also reinforce security at hotels where delegations for the games are staying, airports, tourist locations and other areas where protests could take place, according to a statement by the mayor’s office.

President Dilma Rousseff, who has struggled to stay ahead of the protests after being jeered at the tournament’s opening match June 15 in Brasilia, hasn’t said whether she’ll accept a FIFA invitation to attend the final. Her official agenda e-mailed by the presidential press office last night showed no official commitments over the weekend.

‘Not a Prophet’

“I am not a prophet so I can’t say if she’s there or not there,” FIFA head Sepp Blatter said at a press conference in Rio

South Africa’s President Jacob Zuma attended the final of the 2009 tournament in Johannesburg and alongside Blatter presented Brazil the championship trophy after its squad defeated the U.S.

Maracana’s privatization, and Batista’s role in it, have been questioned before.

Echoing complaints of protesters, Rio’s public prosecutor last month obtained an injunction blocking the stadium’s lease, arguing that IMX, as author of the feasibility study, had access to privileged information and that the state’s financial interests weren’t being defended.

Days later a judge suspended the injunction on the grounds that upholding the ruling would compromise Rio’s ability to organize events and expose it to “serious consequences” for breaking an international commitment.

Shares Fell

Batista owns several companies including oil company OGX Petroleo & Gas Participacoes SA and shipbuilder OSX Brasil SA (OSXB3), both of whose share prices fell more than 80 percent over the past year. Batista, whose $34.5 billion fortune in early 2012 made him the world’s eighth-richest person, this month dropped from the ranks of the 200 wealthiest people.

Protesters this weekend also want to call attention to the plight of residents being forcibly evicted from their home to revitalize urban areas ahead of the World Cup and the city’s hosting of the 2016 Olympics. Amnesty International, in a 2013 report on the state of human rights around the world, said Brazilian authorities have failed to engage communities affected by the building spree.

Rio’s Mayor Eduardo Paes says only one community is being evicted due to the Olympics and residents would’ve been uprooted anyways because their homes were built in an environmentally-protected area. Other resettlement projects under way are aimed at improving services and access for hillside slums, with all residents offered compensation, the mayor’s press office said.

To contact the reporters on this story: David Biller in Rio de Janeiro at dbiller1@bloomberg.net; Tariq Panja in Rio de Janeiro at tpanja@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

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