Laws, Speculation, Eminent Domain, Stadia

The scenario – in Brazil it typically takes about 38 months for a government-funded project to go from approval to payment for services. The bureaucratic hurdles to implementing infrastructure projects and social programs are so formidable that even the gods of Olympus would have to take a few extra running steps to clear them. The three year delay between approval and implementation has the house of FIFA in a fine lather, so Dilma’s left-center government has come up with a solution to the bureaucratic bottleneck: RDC.

The RDC (Regime Diferenciado de Contratações Públicas / Differentiated Regime for Public Contracts) is a fundamental element of the Medida Provisória 527, a Provisional Measure that comes from the Executive branch and requires approval from both houses of the Legislature. The original purpose of MP 527 was to create the Ministry of Civil Aviation, but as it was moving through the halls of Brasilia it picked up the RDC.

The alteration of “normal operating procedures” is a hallmark of mega-events which install states of exception and emergency in the cities and countries where they pass. The time pressures of the event and the contracts signed with Swiss-based NGOs allow for the dribbling of democratic processes and the installation of extra-legal authorities that disappear after the events, leaving no one accountable for the wreckage and debt left behind. Greece is burning in large part because of the huge debt spending for the 2004 Olympics, but no one points the finger at the IOC, the government, or the sponsors of the event. No money left in the public coffers? Austerity for the people. 

There are conflicting needs expressed in the RDC and MP 527. Brazil is woefully late and staggeringly over budget in the production of facilities for the 2014 World Cup. There is a need to have a mechanism that lowers, or at least controls, the costs of stadium and infrastructure projects at the same time that the contracting and payment process can be accelerated. There is also a need for greater transparency in the bidding and contracting processes. The problem with "acceleration" or "differentiation" is that it opens the possibility for even more corruption than usual. The main concern of those opposed to the RDC is that it will make secret the price of the projects until after the projects are awarded. This information will be “secret and will only be available to internal and external organs of fiscal control”. Basically, this means that we will never be able to find out how much projects cost.

Worse, these budgets can be kept from public scrutiny forever if they are considered to be relevant for “state security”.

On the bright side, it appears that the “super-powers” of FIFA and the IOC which would have allowed them to demand significant modifications to projects after the contracting process, potentially increasing their cost. Also on the side of transparency and democracy was the inclusion of Federal financial control organs in the list of agencies that could have access to the budgets: Tribunal de Contas da União (TCU), Controladoria-Geral da União (CGU) and Ministério Público (MP).

The Senate should vote on MP 527 this week and there may be some alterations to the final version, so more on that soon. The extreme content of MP 527 has generated significant debate about the role of transparency for mega-event installation. This is a good and necessary debate, but again, one that should have begun back in 2007 when Brazil was first handed the task of preparing for the 2014 World Cup.

See, we're sending those poor people to the puta que pariu!

In Rio, the real-estate speculation boom continues apace. This week, the city announced the winner of the Porto Olímpico contest, a massive re-urbanization prject that will bring millions of square meters of office space and upper middle class residences to the Zona Portuaria. Of course there are the normal references to the “inspiration of Barcelona” and the role of the Olympics in revitalizing the port area. Left out of the celebrations are the reports that many of the Zona Portuaria's traditional tenants and residents are being forced out to make way for the “revitalization”.

One of the most egregious examples of the approach the city is taking in their maniacal desire to re-make space and culture is the expulsion of the Samba schools that have traditionally occupied the region. Twelve schools will have 30 days to leave the area which the Porto Olímpico project will occupy. Out with the old and traditional, in with the new and consumerist. In addition to the samba schools, families and small businesses that occupy the old Federal Railway Depository (RFF) will also have to find somewhere else to go. This is all directed by CDURP, the private enterprise that is responsible for the “re-urbanization” of the Zona Portuaria with R$ 7.6 billion in stimulus from the Caixa Econômica (in addition to several billion more from the FGST, a public workers pension fund). That is to say, uma porrada de dinheiro público para lucros privados.

Speculation and "Re-vitalization", the winning project for the Porto Olimpico

To round off the post, there is a report in today’s Valor Econômico (1.7.11, A7) about the financing of São Paulo’s World Cup stadium, the Itaquerão. In addition to the low-interest R$400 million loan from BNDES, Corinthians (Lula’s team) will receive hundreds of millions from the city as well as a R$30 million exemption from ISS (Taxes for Services Provided). The cost of the stadium, which a few weeks ago was R$700 million, has jumped to R$ 1,07 billion. The city is only guaranteeing financing if the Itaquerão manages to attract the opening game of the cup, further politicizing the already highly charged relations between the CBF and the host cities.