Olympic Metro Gets Presidential Pledge for Last-Minute Funds

  • Rio waiting on nearly 1 billion-real loan to complete subway
  • IOC president Bach says Temer pledged ‘unconditional support’

Brazil’s federal government has promised additional funds to help Rio de Janeiro complete constructions ahead of the Summer Olympics, including a delayed subway line, as the state finds its own financial capacity crippled.

“We will collaborate not just with words, but also with the financial needs,” Acting President Michel Temer said Tuesday in the Olympic park, answering questions from reporters for the first time since taking office last month.

Michel Temer
Michel Temer
Photographer: Jin Lee/Bloomberg

He promised to come up with a solution to complete the subway line designed to bring spectators to the Olympic Park but did not specify which other projects could also receive federal funds. A specific amount of assistance will be provided “by the start of next week,” Temer said.

Rio’s new subway line is scheduled to start partial operations four days before the Aug. 5 opening ceremony. Finishing works is contingent on a loan the Treasury hasn’t yet authorized after it was forced to cover Rio’s default with a multilateral lender. Brazil’s federal government has fiscal problems of its own as it runs a near-record budget deficit that already prompted a downgrade of its debt to junk.

To read about Rio state’s financial troubles, click here

Financial studies for the metro loan are nearing completion, Temer said. Rio’s transport secretariat said in an e-mailed note last week it is confident the national development bank BNDES will provide a 989 million-real loan that is “crucial’’ for the subway to be included in the Olympics transport plan.

A subway station under construction in Rio de Janeiro, on May 25.
A subway station under construction in Rio de Janeiro, on May 25.
Photographer: Dado Galdieri/Bloomberg

Security Concern

The rush to conclude the subway in time for the Olympics has raised security concerns. Rio state’s audit court, known as the TCE, last week gave the state rail transport company RioTrilhos one month to present reports verifying the system passed all tests to operate. The TCE highlighted the test period of the metro has been cut to 60 days from a full year in the original contract, and that full operation was supposed to start last October. That has forced builders to speed up works in the final construction phase.

The acceleration of works and cutting short the test period raise “doubts about whether there is enough time reserved for all adjustments and tests necessary to carry out a safe and trustworthy operation,’’ according to the report.

Also of concern is that the metro won’t have an auto-pilot system until December, TCE’s president Jonas Lopes de Carvalho Junior said in an interview on Tuesday. That constitutes a “contractual irregularity,” he said in his office.

Once the TCE receives RioTrilhos’ responses, it will determine a course of action that could include fines or even suspension of the subway’s operation if it is believed to endanger its passengers.

“Hurry is the enemy of perfection,” Lopes said. “What matters to us, in this specific case, is the safety of the population.”

The Transport Secretariat said in an e-mailed statement that tests of metro systems began in January, and that all safety procedures were taken into consideration.

To read more about delays in completing the metro, click here

The government’s contingency plan if the metro isn’t running is to transport tourists via the new rapid-bus transit system, Sports Minister Leonardo Picciani told Bloomberg in an interview last week.

Also speaking to reporters, International Olympic Committee President Thomas Bach said Temer expressed “his unconditional support” to the Olympic Games during a meeting earlier on Tuesday.

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