Official Blames Brazilian Bureaucracy for Soccer Stadium Delays

The group behind a World Cup stadium that has fallen months behind schedule and is 44 percent over budget blames “Brazilian bureaucracy” for its woes.

Progress at the Arena da Baixada in the southern state of Parana has been the slowest among the six arenas still under construction for next year’s soccer showpiece, according to official data. Brazil is spending about 8 billion reais ($3.4 billion) on 12 stadiums for the competition that kicks off on June 12, and almost all the projects have been beset by cost overruns and delays.

“Brazilian bureaucracy,” Mauro Holzmann, executive director for marketing and communication for soccer team Atletico Paranaense, said when asked why the Arena da Baixada remained a building site and why the price to remodel it grew to 265 million reais from 184 million reais in 2010. “We expected a loan from the state development bank in June 2012 and it ended up being seven months late.”

The funding delay meant the project, backed by Atletico Paranaense and municipal and state governments, was a casualty of inflation in Brazil’s booming construction sector, he said. Paranaense will play in the 41,456-seat stadium.

Adding to the delay, the original design failed to include the minimum amount of media and VIP seating required by soccer governing body FIFA.

Repayment Guarantees

Brazil’s development bank BNDES agreed in August 2012 to provide low-interest loans for every World Cup stadium project, including 131.7 million reais to Arena CAP S/A, a company created for the venture. Before releasing funds it required repayment guarantees. BNDES said yesterday in a statement that it has disbursed 124.6 million reais, or 95 percent, of the total amount.

The loan was provided to the state of Parana, which guaranteed the debt against an annual federal grant from the government, the statement said. Should it fail to repay the debt, the government could withhold part of the annual funding it pays to every state. The bank has agreed to loan a total of 3.8 billion reais to the 12 World Cup stadium projects.

The delays were part of the city ensuring the proper use of citizens’ funds, said Gladimir Nascimento, a spokesman for the Curitiba mayor’s office.

Brazil is spending about $11 billion on World Cup-related work. Some residents argue the money would be better spent on improving inadequate public schools and hospitals.

June Demonstrations

A record number of people joined demonstrations during June’s Confederation Cup, a test event for the World Cup.

“We have suffered from a lack of quality in public services,” Curitiba Mayor Gustavo Fruet said. “This caused demonstrations that had never been seen before and came out of nowhere. Society might be very happy with the World Cup, but they expect the same effort for social progress. It was a very clear statement.”

As well as a soccer stadium, the area around the facility in the city of 1.8 million is being made into a public space with entertainment venues and commercial space. The combination of private and public money led to lengthy discussions over how much each group should pay, according to Fruet.

“All the negotiations had moments of tension,” Fruet told reporters.

Work at the Arena da Baixada was to be completed by Dec. 31. Three days ago, mounds of gravel covered an area where the field is to be laid, none of the seats had been installed and the roof was partially finished.

Test Event

A planned retractable roof will now be fitted only after the tournament, since FIFA said its construction would delay completion further.

“If we had the funding when we were supposed to, we would have had 18 months to finish and we would be complete by Dec. 31,” said the stadium’s Uruguayan architect, Carlos Arcos.

The grass is being grown 540 kilometers (335 miles) away in Porto Alegre and will be rolled out on Jan. 15 ahead of a test event planned for mid-February. The first of the stadium’s four World Cup games is on June 16 when Iran meets Nigeria.

“We are certain the stadium is not going to suffer any more delays,” Fruet said. “We are now on track with plenty of spare time before the World Cup.”

Last week, workers involved with the project went on strike for up to three days and paralyzed one of the city’s main roads for an hour in a protest over unpaid salaries.

“It won’t happen again,” said Holzmann. “It was just a little misunderstanding.”

The deaths of three workers at World Cup stadiums within the past month have added to concerns. A crane collapsed and killed two men at Sao Paulo’s Itaquera stadium on Nov. 26 and a worker died on Dec. 14 after falling 35 meters while working on the roof at the Arena Amazonia in Manaus, where work is also well behind schedule.

“The pressure is rising every day,” the mayor said.

To contact the reporter on this story: Tariq Panja in Rio de Janeiro at tpanja@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net

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