The slumping Brazilian economy and a wave of corruption scandals has put a wrinkle in preparations for this summer’s Olympic Games. This week Rio de Janeiro’s iconic Maracanã stadium, which will host the Opening Ceremony on Aug. 5, announced it’s slashing its maintenance staff by 75% in an effort to cut costs.
The troubles facing Maracanã, one of many Brazilian stadiums operating at a loss, are causing nervousness ahead of the Games. The financial crisis is compounding concerns about slow preparations for the Olympics and Rio de Janiero’s water pollution and utility problems. Electricity and water were recently cut off in the Nilton Santos stadium in Rio due to unpaid utility bills. The stadium is scheduled to host track and field competitions during the Olympics.
The whole situation has the feel of an international embarrassment in the making.
“Part of the importance of the Olympics was the possibility of leaving a legacy for the city and the people once the games were over. This has been compromised,” said Glauber Braga, a Brazilian Congressman from Rio.
Braga says corruption probes are also complicating Olympic preparations.
The decision to fire 40 staff workers at Maracaña stadium was made by a private consortium headed by Odebrecht, a huge construction company that has been managing the stadium since 2013 and is now implicated in the corruption scandals plaguing President Dilma Rousseff. Last June, Brazilian authorities arrested the company’s top executive, Marcelo Odebrecht, and accused him of participating in a bribe scheme to win contracts from state-owned oil giant Petrobras.
The consortium announced it would be bringing in its own workers to the stadium and is negotiating a new operating contract with state authorities.
Congressman Braga said most of the Maracaña was renovated using public funds, so it was easy for Odebrecht to assume control of the property without incurring too many initial costs. But efforts to increase revenue by building a commercial hub in the area surrounding the stadium failed after meeting fierce resistance from those who would have been displaced, including an indigenous community.
Fusion reached out to Odebrecht and the Rio 2016 olympic organizing committee but did not receive a response.
Brazilian media reports that Odebrecht could pull out of its contract, sticking the city with the bill. “The company doesn’t want to take any risks and those left with the tab are Rio de Janeiro taxpayers,” Braga said.
Brazil is still trying to shake off its World Cup hangover. The country spent some $3.6 billion (considerably more if taking into account Brazil’s plunging currency) building and renovating stadiums for the World Cup. Many of the expansions went wildly over budget. A 42,000 seat stadium was even built in the middle of the Amazon jungle.
The lavish spending sparked mass protests nationwide from Brazilians who demanded better investment in areas like education and healthcare.
Now a stadium that was once the pride and joy of the country seems to be turning into another white elephant.
The government is cutting Olympic preparation costs in an attempt to keep the overall budget under $2 billion.
Victor Boyadjian contributed to this report from Brazil.