World Cup Brazil 2014

Yesterday, FIFA announced that Brazilian corporation OI will be World Sponsor of the World Cup 2014 (the word Oi means “Hi” in Portuguese).

So, besides having stadium works behind schedule, airports not ready,  poor transportation infrastructure (and new projects also delayed), now FIFA will partner with the worst  telecommunication company in Brazil to provide the communications infrastructure of the World Cup 2014.

The sound of the word FIASCO is growing louder and louder.

As FIFA said, Oi is the largest telecommunications company in Brazil. But there are many other facts that FIFA didn’t comment on; this post will direct to a few sources in the internet which talk about Oi; from this point below, personal opinions were avoided.

Oi is the new name (changed a few years ago) of Telemar (at the time of this writing, www.telemar.com.br redirected to www.novaoi.com.br).

Telemar was a consortium created to participate in the privatization process in 1998. There were several accusations of corruption in the participation of Telemar (a detailed report is here); there are voice recordings of high staff Governments indicating that the selection of bidders was biased, and that pension funds and BNDES funds (public money) were used to favor certain competitors and unfavor others (by the way, Telemar won the bidding process for one of the areas with an overprice of only 1% above the minimum bid; the winners of the other privatization areas had to pay overprices of 64%, 47% and 6% – read more about Telemar and bribes).

Today, the man behind Oi is Daniel Dantas, banker, owner of Opportunity (who, at the time of the privatization process, was involved with consortium Brasil Telecom).

Mr. Dantas appeared on the news several times in the past few years, such as (among others that I won’t remember) having spied on competitors, having spied members of the Government; having ‘business disagreements’ with Citicorp.

In 2005, news came out that Telemar had businesses with Lulinha, son of President Lula. Formerly, Lulinha worked in a Zoo, being paid barely above minimum wage; after his father was elected President, Lulinha started an obscure TV program, that few people cared about; Telemar paid R$ 5 millions to sponsor that program, and Lulinha became millionaire.
In 2008, Telemar wanted to buy Brasil Telecom (other of the winning bidders in the privatization process). This was against the law, because would result in too high concentration of the market. Just at the right time, however, Brazilian regulatory agency Anatel changed the legislation and allowed the purchase.
Brazilian news sites are full of notes about the coincidences involving Dantas, Oi, José Dirceu, Anatel, Lulinha, etc.

Dantas was arrested on July 8th 2008. Dantas threatened to open his mouth and talk about Senators, Deputies, judges. On July 9th, Dantas is released. On July 10th, Dantas is arrested again. And on July 11th, Dantas was released again.
The orders to arrest Dantas were issued by a First Instance Judge, Fausto Martin de Sanctis; the orders to release him were issued by a Justice of the Supreme Court, Gilmar Dantas.
On July15th 2008, Humberto Braz,  the lieutenant of Dantas, was arrested, charged of trying to bribe (US$ 1 million) a Federal Agent, so that the agent would exclude Dantas and his sister from criminal investigations. In conversations recorded by the Police with Judicial authorization, Mr. Braz says to the Agent that “Daniel Dantas is worried only about what’s happening today. Up there, what’s going to happen there (in the Superior Courts), he doesn’t care. In the STF (the Supreme Constitucional Court) and in the STJ (the Supreme Law Court), he won’t have any problem”.
Today, Dantas is free, and the criminal process against him is still in the Courts; Brazilian news sites are full of notes about the process.

After purchasing Brasil Telecom, Oi became an even bigger company. But clients became more and more unhappy with the services. A survey in google for oi telemar procon (Procon is the Consumers Defense Agency) returns 200,000 pages. Oi is constant presence in the list of most complained about companies in Brazil (notice: among all companies, not only telecom companies); reclameaqui.com.br, a site about complaints, has thousands of records against Oi.

Update, April 10th 2010. Yesterday, April 9th, newspaper O Globo published a short note informing that the Brazilian Government was considering to contract Oi to manage the National Bandwidth Plan. The note sparked more than a 100 comments, almost unanimously attacking Oi; comments were on the line of “Oi is dishonest, Oi doesn’t deliver the bandwidth I paid for, Oi is an expensive monopolist, my bandwidth internet hasn’t been working for days, Oi is the worst telecom company in Brazil, I had to bribe Oi employees to have my bandwidth installed” and so on. Definitely, Oi is  not the most popular corporation in Brazil.

This is the company that FIFA is partnering with.

On October 30th 2007 (nearly two and a half years ago), FIFA named Brazil as the host country of the World Cup 2014; and on June 1st 2009 (nine months ago), FIFA and CBF announced the twelve host cities of the Cup.

FIFA set March 1st 2010 as the deadline for all hosts to have started the works to build or refurbish the stadiums; today, March 3rd 2010, only three of the hosts have started some works (but not one brick has been laid – see report further below).

A few weeks ago, FIFA expressed preoccupation with the delays in South Africa;  “if the World Cup started tomorrow, we wouldn’t be ready”, said Secretary General Jerome Valcke. Yesterday, when celebrating the 100 days countdown to the 2010 World Cup, Valcke declared that “FIFA won’t have with Brazil the same patience they did with South Africa“.

CBF sent a message to all host cities, demanding explanations for the delays. A new deadline was set to start works: May 3rd. CBF said that cities which don’t comply with deadlines may loose their rights to host matches. The deadline for all stadia to be finished continues to be December 31st 2012, six months before the kick off of the Confederations Cup 2013.

Current situation of the stadiums:

Belo Horizonte: works scheduled to start on June 12nd; the Government is still looking for private partners to finance the works.

Brasília: works were scheduled to start in April; however, a case of corruption came out, and the ex-Governor was impeached and is under arrest. Political indefinition will probably cause delays.

Cuiabá: works scheduled to start on March 23rd.

Curitiba: Atlético Paranaense, owner of the stadium Arena da Baixada, estimates that they will need R$ 80 million to adapt the stadium to FIFA demands; now, they are looking for the money.

Fortaleza: works scheduled to April. The bidding process was started in December 2009, contractor to be known late March.

Manaus: Prosecutors required changes in the bidding process; works are scheduled to start in April.

Natal: bidding process to start in April; works to start in June.

Porto Alegre: Internacional, owner of Beira-Rio, claims that some internal refurbishments were already started; however, nothing in the structure was changed. Internacional is claiming tax exemptions to buy construction material to refurbish the stadium.

Recife: works to start in May. According to the local committee, delays were caused by late changes in the project to adapt it to environmental laws.

Rio de Janeiro: the local committee says that sub-soil studies have started on March 1st; clearly, a cosmetic measure to pretend to comply with FIFA deadlines. The bidding for the major works will be launched in April.

Salvador: the bidding process is finished, the contractor is defined, but the Goverment still need money and environment licenses to start the works.

São Paulo: probably (and suprisingly), Morumbi is the stadium with most problems. Neither Sao Paulo FC (owner of the stadium) nor the Governments want to spend money with the stadium. Some changes were made to the project which had been originally approved, but FIFA didn’t like the changes; FIFA President Joseph Blatter said that “Morumbi doesn’t meet the FIFA requirements to stage the opening match of the World Cup 2014“.