02 July 2016

Transforming Rio – for the benefit of whom?

Published in the ICSSPE Bulletin number 70.

One of the justifications deployed for hosting the Olympic Games is that they will offer transformational benefits for metropolitan areas. The extensive upgrades to physical infrastructures that accompany the colossal event are wrapped in the discursive framework of “legacy” – a word that carries positive connotations in social, economic, and physical realms. However, empirical evidence for lasting, positive effects of sport mega-events is sorely lacking (Bass, Pillay, & Tomlinson, 2009; Horne & Manzenreiter, 2006; Porter, Jaconelli, Cheyne, Eby, & Wagenaar, 2009).

This article will examine two major urban interventions that have been undertaken in Rio de Janeiro as the city has prepared for the 2016 Summer Olympics: the extension of the city´s metro and the privatisation of the port region. I will demonstrate that these “legacy” projects have not had positive effects for the city as a whole, but have rather decreased transparency in government, increased socio-economic inequalities, privatised public space, and torqued urban planning agendas to stimulate real-estate speculation and Games-related transportation agendas to the detriment of more equitable long-term planning.

Bait, Switch, Execute

In evaluating the projects undertaken, the proposed budgets, and eventual Olympic realities we must begin any investigation of Rio 2016 with the bid books that were presented to the IOC in 2009. Following the corruption scandals surrounding the Salt Lake City Olympic bid, IOC members were forbidden to conduct site visits prior to voting on Olympic candidacies. Thus, the only information that many of the voting members had about the Rio 2016 bid would have come from bid books and candidacy presentations at IOC meetings. While this shift in policy may have served to prevent a repeat of previous corruption scandals, the lack of real-time information about existing urban conditions may have been a contributing factor in the IOC´s decision to award the Games to Rio de Janeiro. The city is incredibly photogenic, but chronically dysfunctional. In order to understand the trajectory of the metro and port region projects, it is instructive to examine the contents of the Rio 2016 bid books for a number of reasons.

The first reason is to analyse the projects that the IOC has accepted as satisfactory for Games operations. While each edition of the Games has inevitable adjustments to major infrastructure projects, the general Games plan as outlined in the bid books can be considered a candidate city´s enticement to the IOC – what I am calling “the bait.” Bid books present an idealized Olympic City that will appeal to the aesthetic tastes, functional necessities, and discursive predilections of the IOC (Kassens-Noor, 2012).

A second reason to examine the bid books is to analyse the promised benefits to the resident population, or the “legacy” that public monies will deliver after the Games have gone. In this way we can hold the Games coalition accountable for the (non-binding) promises that they have made vis a vis the candidacy files and will be able to analyse more rigorously the eventual deliverables in terms of cost, functionality, opportunity cost, and public use value.

Third, by looking closely at the bid books, we can then compare the shifts in the Olympic project over time, uncovering these changes within a broader chronology of Games preparation. This is what I call “the switch”.

And finally, while the bid books do not indicate processes of planning, contracting, financing, and construction, by tracing the evolution of Olympic projects from their origins in the bid to their physical presence on the urban landscape, we can identify process of dislocation, corruption, legal exceptionality, and rule by decree. This is the “execute” phase, in which we have seen innumerable instances of human rights violations, police violence, and executive orders that have displaced tens of thousands from their homes in the name of Olympic preparedness (Comitê Popular da Copa e Olimpíadas do Rio de Janeiro, 2015).

The Rio 2016 Bid Book contained a transportation plan that was designed to link four Olympic clusters: Copacabana, Barra da Tijuca, Maracanã, and Deodoro. In the bid book, the plan was to extend Rio´s metro line to Gávea, just past the beachside neighborhoods of Ipanema and Leblon and then to build a Bus Rapid Transit (BRT) line that would link Gávea to Alvorada station in Barra da Tijuca.

[map one here]

The second major intervention planned was to construct a BRT line (called the Corredor T-5) between Alvorada and Penha, in Rio´s Zona Norte. The final planned new roadway was labelled the BRT Ligação C, which would connect the Deodoro Olympic cluster with Barra da Tijuca. The remainder of the Olympic transportation would occur along existing roadways with so-called “Olympic lanes” forming a “high performance transport ring” around the city (Rio 2016, 2009). The Olympic transportation plan was building upon the system that had been put in place for the 2007 Pan American Games, which had linked four games clusters through dedicated traffic lanes taken out of circulation from the general public. On April 27, the Olympic operational plan declared 260km of Olympic lanes for exclusive use by the “Olympic family” [sic], security and emergency services.

The Port Region was mentioned only once in the Rio 2016 bid book, and there was no indication that the Olympics would have a significant presence there.

Not long after Rio had signed the hosting agreement with the IOC, all of these plans changed. No longer would the Metro extend to Gávea, but would only go as far as Jardim Oceânico at the extreme eastern end of Barra da Tijuca. All plans for concluding the previously planned extensions of the metro system were dropped. Additionally, the BRT line linking Alvorada and Penha was extended, at a cost of more than R$500 million, to connect with the Tom Jobim International Airport. The Transoeste and Transbrasil BRT lines were added to the Olympic transportation plan, key elements in the largest reorganization of transportation in the city´s history.

In addition to shifting the Olympic (and by association, metropolitan) transportation network, within weeks after winning the bid, Rio 2016 changed its overall Games proposal, asking the IOC that several sporting and housing venues be moved to the Port Region (Costa, 2010).

The IOC denied these requests, but the shift in public policy was made explicit when mayor Eduardo Paes decreed the entire Port Region (5 million square meters) an Area of Special Social Interest (Gusmão de Oliveira, 2015, pp. 224–226). This opened the way for one of the largest privatisation projects in the Americas, one from which some of Brazil´s largest civil construction firms would profit from the ceding of public territories, infrastructure development, and real-state speculation (Rolink, 2011).

One of the defining characteristics of Rio de Janeiro´s transportation system is that there are no conveyances that are operated by the city itself. Rather, each of the transport modalities (train, ferry, metro, highway, and bus) is operated through a long-term concession. INVEPAR has operated Metrô Rio since 2009 through the “Concessão Metroviária Rio”. As part of this concession, legalized in the same year as the Olympic decision, Metrô Rio (INVEPAR) had as a part of its contract the right of first refusal to build any future extensions to the metro lines under concession.

INVEPAR’s holding of the concession under these conditions was not unusual in the context of the city´s transportation structure, but their undue influence over decisions regarding the future of the city´s metro system would have significant consequences.

The decision to extend the metro to Barra da Tijuca was highly controversial, as many urban planners and engineers had long called for alternative metro lines that would more completely build a transportation network in a notoriously disconnected city. The originally planned Olympic extension of the metro to Gávea would have permitted the pursuit of these previous plans, allowing for an eventual linkage with metro stations that were built in the 1970s but never opened. The creation of a network instead of the extension of the one line would have contributed to the development of a more robust system. The argument of those who came out against the extension of Rio´s metro to Barra da Tijuca was that it would primarily benefit residents of the wealthy Zona Sul and Barra da Tijuca, and the Olympic project would delay the development of other, more necessary and previously planned lines by decades.

Several civil society movements and opposition politicians voiced their concerns about the Olympic transportation plan, but to no avail. As the metro is owned by the State of Rio, the decisions about contracts, concessions, and construction come from the governor´s office. The law firm of Coelho, Ancelmo, and Dourado represented INVEPAR in its dealings with the state. The wife of then-governor Sérgio Cabral, Adriana Ancelmo Cabral, was a principal figure in the negotiations (Junqueira, 2010). The extension of the metro to Barra da Tijuca as part of the Olympic transportation project was not put out to public tender and INVEPAR won the non-competitive bid to build and manage what became known as “Linha 4”.

As the wife of a sitting governor helped INVEPAR to put together a proposal to extend the metro by 23 km, they brought together some of Brazil´s biggest construction firms into a consortium called Rio Barra S.A. to undertake the construction.

Queiroz Galvão Participações - Concessões S.A., Odebrecht Participações e Investimentos S.A. and Zi Participações S.A together with INVEPAR convinced the State of Rio to seek R$7.5 billon in financing from three institutions: Agência Francesa de Desenvolvimento, Banco do Brasil and BNDES, Brazil´s National Development Bank.

Odebrecht and Quieroz Galvão have been at the epicenter of the Lava Jato corruption investigation in Brazil and in 2015 the CEOs of both companies were convicted of corruption, money laundering, and criminal association and are currently in federal prison. Their companies, however, remain part of the consortium and are still receiving state monies for the project.

Inevitably, costs increased and the project hit delays (Magalhães, 2012). In March of 2016, the Rio state government had run out of money for the final phase of construction and was seeking an emergency R$1 billion in financing so that the metro extension could be completed. As of this writing, it is unclear whether or not the metro will be operational for the Olympics.

Regardless, the project has been shrouded in controversy since its implementation, has come at a tremendous opportunity cost for the development of a more integrated transport system. Additionally, the debt burden of the State of Rio increased dramatically in the period 2009-2016, largely as a result of financing transportation, hotel, sporting, and security infrastructure related to the Olympic Games.

In early 2016, the Rio State government resorted to parceling out R$1.8 billion in salary payments to public servants and has begun to close health clinics citing a lack of funds in the midst of Brazil´s worst recession in living memory (Lobianco, 2016). Students and teachers have occupied more than sixty public schools as they fight against budgetary cuts (Nitahara, 2016). In total as of this writing, the government owes R$19 billion for the Linha 4 metro project that was originally budgeted at R$5.6 billion (Dutra & Lima Neto, 2016). Fearing that it will not be operational for the Olympics, in February of 2016, mayor Eduardo Paes suggested that the IOC strongly consider alternative transportation solutions for tourists.

The “Marvelous Port”

As I mentioned above, in the weeks following the IOC´s hosting announcement in October of 2009, the mayor´s office and Rio 2016 petitioned the IOC to move venues, housing, and media installations to the port region. This region would soon become the site of the “Porto Maravilha”, created through a series of mayoral decrees between November 2009 and April 2010. As part and parcel of this project, known as a Public Private Partnership, the city of Rio created the conditions for the development of an Urban Operation Consortium (Operação Urbana Consorciada) that would be financed through the selling of Certificates of Additional Construction Potential (Cepacs).

This means that a group of companies would be able to take possession of public territories and finance the redevelopment of the port area through the selling of construction rights – a built in real-estate speculation mechanism. In this case, the construction giants OAS, Odebrecht, and Carioca Christiani-Nielsen formed the consortium Novo Porto. The Brazilian state-owned CAIXA bank stepped up to purchase all of the Cepacs for R$3.5 billion in 2011; the valorization of the certificates guaranteed a further R$4.5 billion in financing for the Porto Maravilha projects (Netto, 2013). As with the metro, private companies were not required to invest their own capital in the multi-million dollar projects.

As part of the broad plans to “requalify” the center and port regions, the mayor´s office embarked upon a project to install a light rail system (VLT). When Rio was expanding past the narrow confines of its colonial footprint, tram systems owned as concessions by British companies had crisscrossed the city. As Brazil industrialized, the rails were ripped up as modernist urban planners reconfigured the city to meet individual transportation needs at the expense of public conveyances (Abreu, 1987).

In the context of the 2016 Olympics, the reinstallation of a light rail line in the center of the city is intended as a marker of metropolitan sophistication, post-modern urban bling. The VLT will only articulate through the port and centro districts, connecting even more an area already comparatively well-serviced by metro and bus lines. The government and the consortium responsible for the VLT system self-consciously refer to similar systems in Europe and Asia as markers of international best practice in a part of the city that has long suffered from radical inequality and a lack of basic infrastructure (Broudehoux, 2014). By comparison, the SuperVia train system only received R$2 billion in investment over the last ten years

Though the numbers are somewhat unclear, the most accurate figures place the cost of Rio´s VLT system at R$1.157 billion, with R$532 million coming from Brazil´s federal PAC Mobility program and R$625 million coming from the PPP signed between the VLT Carioca Consortium and the City of Rio. The VLT consortium is comprised of Odebrecht, INVEPAR, CCR, RioPar, RATP (France), and BRT (Argentina).

A second feature of the Porto Maravilha project related to the short term planning goals of the Olympic Games has been the insertion of a cable car into the Providência favela. The general plan for the remodeled transportation system in the Port Region is to link up the VLT with the Providência cable car, yet the project has been beset by problems since its inauguration.

As numerous media reports have highlighted, Providência residents were never consulted about the trajectory or necessity of the cable car and more than 200 families have been removed through compulsory purchase orders deemed necessary for cable car implementation. The cable car has functioned only irregularly since its partial inauguration in 2012.

These projects located in the Port Region have come with some necessary and long-delayed improvements to the quality of public space in the Praça Mauá region. The Praça Mauá, one of Rio´s most historic sites has been transformed into an international-style tourist zone, replete with a Santiago Calatrava museum, a new point of disembarkation for cruise ships and a symbolic and functional cleaning of the seedier elements of the historic port.

As a counterpoint to some of these developments, the city has actively sought to stimulate real-estate speculation and gentrification in the region. In addition to a badly mismanaged architectural competition for a business district in the Port Zone where the winning architectural firm was found to be headed by the son of one of the judges (Jornal do Brasil, 2012), the city government and the Consorcio Porto Novo have used the hook of the Olympics to align public policy with private interests.

While the IOC was not willing to move their competition sites to the Port Region, the city has situated the non-credentialed media center there and has made the new circuit of museums and transportation lines central elements of its global marketing campaign.

The urban dynamics of the Rio de Janeiro 2016 Summer Olympics are more complicated and extensive than can be fully explored here. The wide range of opportunity costs and specific outcomes of the chosen urban interventions will take many years to come to light. Given the historically large corruption scandal currently unfolding in Brazil, it is no surprise that nearly all of the companies involved in Rio 2016 infrastructure projects have been implicated in some way. What this article has demonstrated is how two elements of these citywide interventions have propagated the status quo ante and more deeply aligned public policy and urban planning with private interests.

In particular, the Metro and Porto Maravilha projects are worth examining because they are the two most expensive and extensive urban interventions in Rio de Janeiro for the Olympics. While only the metro was included in the Rio 2016 bid books, its scope was reduced immediately afterwards and more extensive transportation modifications emerged in the form of BRT lines.

The political machinations that propelled the metro line forward were consistent with the ways in which public transportation planning happens in a city that has long been dominated by civil construction firms that function as cartels (Coelho, 2013; Fernandes, 2013; Ritto, 2013). The company at the center of the Lava Jato corruption scandal, Odebrecht, was found to have paid at least R$500,000 in bribes to secure their participation in the metro project. The same company was or is involved in at least seven other Olympic-related projects.

The Porto Maravilha received only the scantest of mentions in the Rio 2016 bid documents, yet has since become a central feature of the city´s urban planning and tourist agendas. The requalification and privatization of five million meters of urban territory has had far reaching consequences for residents, which have traditionally been poor and working class.

The desire to create a landscape of global consumption for international tourists and a template from which real-estate firms can extract rents has been coupled with military intervention in favelas and a top-down insertion of “state of the art” transportation projects. Both the VLT and the Providência cable cars are elements of urban bling that are intended to give Rio a veneer of the “global” while making the territory of the favela more accessible to tourists and consumers.

The VLT is replicating some of the same systems and routes that were in place in Rio one hundred years ago, albeit at much greater cost. At R$1.2 billion and counting, the 23 km VLT received around 60% of the total financing invested in the 270 km SuperVia suburban rail system over the last ten years.

Along with the rest of Brazil, the city and state of Rio de Janeiro are entering into serious financial difficulties. The state government has resorted to parceling out salaries and the city has begun to close schools and health centers. The debt servicing on the many projects associated with the Olympic Games have been exacerbated by long-standing practices of corruption and price inflation in public works.

The linking of key urban infrastructure with the artificial deadlines imposed by mega-events may help to overcome political hurdles to their realization, but this association is also a guarantee that the projects will cost more than if they had been pursued independently of the event itself.

The Linha 4 Metrô project in Rio was clearly never in the long term plans of the city until the Olympics came and “captured” the city´s agenda. This is a key characteristic of the current mega-event business model and one that has to be seriously questioned in light of the research presented here.

Works Cited

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