20 July 2010

Putting the pieces together, building the Olympic city

Today’s headline in OGlobo: government gives R$ 20 billion (US$11.2 billion) for the 2014 World Cup. This astronomical sum is divided between airports (R$5.6 b), ports (R$740 m), hotels (R$ 1.8 b), stadiums (R$4.8 b), and urban mobility (R$7.8 b). These are most of the essential pieces of hosting a mega-event. This R$20 billion does not include investment from state and municipal governments, which, along with the inevitable cost overruns will push limits of my solar powered calculator. If only they would hurry up with the damming of the Xingú!

On page 15 of today’s OGlobo (I do actually get news from other sources, but this is the morning ritual), three more indications that things are moving quickly in Rio:
 1) There is a proposal to the Plano Director (Master Plan) of Rio that will allow for the privatization of public spaces, ala the Business Investment Districts that Giuliani installed in NYC in the 1990s.

2) The Port of Rio will receive R$1.6 billion in public investment through 2014. This money is separate from and in addition to the R$ 20 billion announced on the front page.

3) The Olympic project will forgive any and all debts accrued by Rio’s Dock Company (Companhia das Docas) in order to facilitate the transfer of real estate to private investors. This debt remission needs to be added to the public financing as well, but no one knows just how much is owed by the Companhia das Docas to the federal government.

There are complex calculations that need to be done in order to arrive at an estimated value for the planned investments. One example is the R$3.5 billion that is being redirected from the Fundo de Garantia por Tempo de Serviço (Gauranteed Fund for Time Served, a public pension fund) for the demolition of  one stretch of the Elevado de Perimetral. This demolition is part of the Rio city government’s Porto Maravilha project. This should be considered a public investment but it is unclear who is going to receive the money, who will direct the project, and how the government intends to track the spending.

At the same time that Lula is throwing as much money as possible at mega-events, he “fears the errors of the 2007 Pan American Games” (p. 6 in the Sports section). The Pan 2007 was ten times over budget and left no “urban legacy” for the city. Part of the problem during the Pan was that no one was clearly responsible for the work being done or the cost overruns, so the government ended up with the tab. The Olympics are an order of magnitude greater than the Pan and the same people are in charge, with modifications that will make the money trail even harder to follow. The World Cup is not as financially demanding, but all the same, Lula affirmed that the federal government will create conditions for World Cup host cities to “increase their debt capacity” so that they can restructure urban space in order to host FIFA’s private party.

There is a government website dedicated to the control of public spending on the Olympics, but since it was launched at the end of 2009, it has not changed in the slightest and is perpetually under construction. Last month, Lula created the APO (Public Olympic Authority) as well as the Empresa Brasileira de Legado Esportivo S.A. - BRASIL 2016 (Brazilian Company for Sporting Legacy, Inc), which will do a million different things in addition to receiving all of the money from the government directed at the Olympics (R$30 billion). The creation of two parallel government institutions to direct the 2016 Olympic Project is going to cause some serious confusion. Making sense of where and how the money goes in and where and how it comes out is going to make my head hurt for the next decade.

In the coming months I will be attempting to put all of these pieces together into some kind of coherent framework and welcome all comments and connections. As I see it, the construction of the Olympic City and World Cup nation involves the following elements, many of which are overlapping:
1)      City image and branding
2)      Political hegemony (in Brazil's case)
3)      Financing
a.       Federal, state, local
b.      Public Private Partnerships
c.       Transparency, corruption, & accountability
4)      Parallel government structures
a.       CBF / LOC 2014
b.      COI / LOC 2016
c.       APO
d.      BRASIL 2016
5)      Alteration of customs and immigration laws
6)      Environmental projects
7)      Re-structuring of urban space
a.       Urban “renewal” projects
b.      Real-estate speculation
c.       Changes to zoning laws
d.      Direct and indirect population resettlement
e.      Privatization of public space (BIDs)
f.        Façade painting
8)      Modification of transportation networks (international, regional, local)
a.       Airports
b.      Train
c.       Metro
d.      Bus
e.      Car
w.  Ferry
z.   Bicycle?
9)      Modernization / Upgrade of communication networks
10)   Production of “global” cultural spaces
a.       Museums
b.      Consumer culture
c.       Commodification of locality
d.      Tour guide and taxi driver language training
11)   Tourist accommodation
12)   Athlete, referee, and media accommodation
13)   Security
14)   Sport installations
15) Global Crime Networks (GCNs)
16) Corruption, Conflict of Interest, Transparency

Nossa senhora! A gente tem muito trabalho pra frente…


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