According to Brazil Sports Minister, Aldo Rebelo, “The Confederations Cup represents a test for our preparations almost exactly one year ahead of the FIFA World Cup; we overcame delays and the tournament was a success.”
The financial stakes are also high. The University of São Paulo estimates that infrastructure investments in Brazil leading up to the World Cup will total about USD18 billion, about 77 percent of which will come from the pockets of Brazilian taxpayers. The Olympics are expected to cost another USD15 billion.
What will Brazilians get back for that investment? While investment and payback figures for large sporting events are notoriously spotty, the Minister points to reports prepared for the national government that estimate about USD70 billion will be pumped into Brazil’s economy between 2010 and 2014 alone, generating USD5.5 billion in tax revenues and 3.6 million jobs by the end of the World Cup tournament. Another consultant has estimated that investments in the World Cup will add slightly north of USD90 billion to Gross Domestic Product (GDP) by 2019.
For Brazil’s Minister of Sports, the payback is about more than just money. “The general public will not only have access to stadiums but also to multi-use spaces that include shops, restaurants, cinemas, theaters, and spaces for big events,” he noted. “That ensures the profitability of companies that manage the facilities, and the comfort, safety and enjoyment of spectators.”
Optimism from Brasilia
In December 2012, President Dilma Rousseff flew to Fortaleza to attend the re-opening of the Castelão, the first of 12 stadiums around the country to be built or redeveloped for the World Cup. She was justifiably proud of the upgrade—the result of a Public Private Partnership (PPP)—and the fact that it was completed four months ahead of schedule and within its USD250 million budget.
"Many said that we were not capable of building and delivering Castelão to international standards,” she said at the time. “Well today, we are starting to show that we are capable, and the arena is here.”
According to Minister Rebelo, delivering massive projects under pressure has become a core capability of the Brazilian construction sector. “We’ve achieved some of the most advanced feats of engineering in the world in Brazil, and this is no different,” he noted. “Today, we are also carrying out huge urban mobility projects, upgrading ports and airports and building and refurbishing stadiums, and we are doing it all in the highest spirit of environmental stewardship.”
To ensure they are putting their best foot forward, Brazil’s authorities are also looking at previous games hosts to take away best practices and new approaches. Brazilian Olympic Committee representatives were present throughout the London Olympics in 2012 and learned a number of key lessons. “We are always seeking positive examples from countries that have hosted these types of events,” added Minister Rebelo. “We try to find the best solutions to key problems and then adapt them to our unique circumstances.”
Catching up to its economy
Preparations for the World Cup and Olympic Games are just one piece of a portfolio of infrastructure initiatives aimed at helping the country fulfill its potential. “We are modernizing our cities’ road and transport systems, upgrading ports and airports and expanding the telecommunications network,” noted Minister Rebelo.
Indeed, over the past year, Rousseff has announced ambitious plans to overhaul and modernize the country’s infrastructure with a heavy emphasis on PPPs to fill the funding gap and operate concessions. In August 2012, her administration unveiled an initial USD66 billion scheme to build 10,000 kilometers of railways, build or upgrade 7,500 kilometers of roads and pump USD26 billion into improving the country’s congested ports. The most enterprising part of the Logistics Investment Program is a high speed rail link between Rio de Janeiro and Campinas which will run through São Paulo.
Trial by fire
Would Brazil be making these investments if it had not won the right to host the two sporting events?
“This work would be done regardless of whether or not the World Cup, Olympic and Paralympic Games were held in Brazil,” says Minister Rebelo. “These projects are necessary because we have grown a lot in recent years and our citizens deserve better public services.”
In fact, the approaching global spotlight and the immovable deadlines posed by the events may be just the tonic that Brazil needs to pull its infrastructure up by the bootstraps. Many observers report a greater emphasis by government on planning projects more carefully—with more attention to timelines and in partnership with private investors, including foreign capital.
It might just be that the rush to put its best foot forward at the World Cup and the Olympic Games will advance the permanent benefits of better infrastructure that Brazil so desperately needs.
“The ultimate response to the skeptics will be when we open both the 2014 FIFA World Cup and the 2016 Olympic and Paralympic games with all of the projects ready,” added the Minister.