World Cup Brazil 2014

On March 3rd 2010, FIFA was informed that the works in all stadiums for the World Cup 2014 were behind schedule; at that occasion, CBF and FIFA determined a new deadline: by May 3rd, every stadium should have at least started works – building or refurbishing – to catch up with FIFA’s schedule.

Today, May 3rd, exactly two months later, barely anything changed.

According to international news sources,  FIFA General Secretary Jerome Valcke declared: “I got a report on the status quo of the Brazilian stadiums. I have to say it is not very nice. There are a number (of stadiums) with red lights already, which is amazing. It is amazing how Brazil is already late. And I am not just talking about Morumbi or Maracana stadiums, I am talking about a number of stadiums.”

Much more bombastic, though, was an interview to Brazilian newspaper O Globo (click here); according to the newspaper, Volcke said:

I asked Ricardo Teixeira (president of CBF): how come you signed all those documents and don’t comply with them? We don’t want a rushed World Cup, organized at the last minute.

This year, you have Presidential election, nothing is going to happen. Next year, there is carnival. Are you going to start working only after carnival?

See also repercussions at Yahoo and Reuters.

Asked whether FIFA would consider to cut down the number of host cities from twelve to eight, Vakcke said that “for the time being, we have 12 host cities and we are not in a period where we have to make decisions”.

Last year, FIFA appointed the 12 Brazilian cities which should host matches of the World Cup 2014.

Last week, the Minister of Sports in Brazil, when talking about the delays in the works of the stadia, said that some cities could be excluded from the list of hosts; a few hours later, the Minister withdrew, and said that there are no plans of excluding any city.

FIFA demands a minimum of eight host cities. South Africa will have nine host cities and Germany had twelve. Does Brazil need to have twelve host cities? Can Brazil afford it?

The decision to approve the final host cities is up to FIFA; FIFA will certainly listen to CBF before taking a decision. FIFA and CBF see the World Cup as a business, which must return a profit.

It was by a request of the Brazilian Government that 12 cities were appointed as hosts (and there were still other candidates). The Government hopes to gain world exposition to as many cities as possible, during the World Cup. That would be good.

However, what’s the cost of such diversification?

The first stage of the Cup has eight groups, with four countries each; each group will have six matches. It’s only in this first stage that any host city may claim to host matches; past that, when come the rounds of 16, 8, quarter finals, semi finals and final, matches become more and more important, and FIFA will direct them to the bigger cities and stadia.

So, it is likely that smaller cities such as Manaus, Cuiabá and Natal, will end up building a stadium to host only three matches of the World Cup. These cities don’t have strong local teams to occupy the stadia once the Cup is finished. Past experiences have shown that a World Cup can drain host city’s coffers.

Besides, distances in Brazil are much longer than in South Africa or Europe. Transportation infrastructure in Brazil is poor. By lack of money or of competence, the works in all stadia are delayed. FIFA was concerned with the dealys in South Africa, and will try to avoid the same mistakes in Brazil.

It will be no surprise if FIFA decides to reduce the number of host cities in Brazil.

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“.

Several people have been accessing this blog looking for information about “jobs World Cup 2014″, “jobs Brazil 2014″ and other similar terms.

Probably the best way to get a job in Brazil during the World Cup is as a volunteer. All host countries of World Cups make a call for volunteers (see volunteer work in South Africa 2010); volunteers gain a lifetime experience, and FIFA gets cheap labor force.

In Brazil, there will probably be a higher demand for volunteers than in past World Cups. And the reason is that Brazil has very few English (and other foreign languages) speakers, unlike South Africa (where many people have English as first language) or Japan/Korea and France (where there is a high number of educated people who speak foreigner languages).

The advantage of being chosen as volunteer by FIFA is that all volunteers will be granted a Visa to enter and stay in Brazil during the World Cup. And the Visa is a problem for those looking for a paid job in Brazil during the Cup.

Brazil, like most countries, doesn’t issue visas easily for people looking for jobs (see the legislation about visas to Brazil). Today, a foreigner only gets a work visa under special conditions (e.g., the job vacancy must be offered first to a Brazilian, and the contractor must prove that no national is capable of filling the job, etc).

However, this can change until 2014. Brazil is experiencing a very fast paced growth, and it is clear that Brazilian professionals will not be capable to fill all the jobs which require interaction with foreigner people (e.g., there are no Brazilian doctors capable of talking to foreign patients, there are no Brazilian lawyers capable of handling international laws).

There will probably be opportunities for foreigners to work in Brazil during the Cup, but this will demand changes in Brazilian immigration laws (to facilitate the issuing of work permits). FIFA will probably lobby in favor of such changes, as already happened with tax laws and visual pollution laws.

Only time will tell.

A few weeks ago, FIFA asked the Brazilian Government for a full tax exemption not only for the Association, but to all contractors.

This week, another news brought another evidence of how business oriented FIFA is.

Since Jan 1st 2008, a municipal law has been in force banning outdoors in certain areas of the city, and limiting the size in others. Such law became known as “Lei Cidade Limpa” (Clean City Law).

A report by the New York Times reads:

“All our efforts to negotiate have had no effect because none of the accords and agreements we reached with the advertising sector were ever complied with,” Mayor Gilberto Kassab said in an interview. “A billboard that was forced to come down would be back up a week later in a different spot. There was a climate of impunity.”

Since “it is hard in a city of 11 million to find enough equipment and personnel to determine what was and wasn’t legal, we decided to go all the way, to zero things out,” Kassab said. “When you prohibit everything, society itself becomes your partner in enforcing the law” and reporting violations.

Popular reaction has largely been supportive.

FIFA thinks differently. Using the argument that world sponsors are going to spend US$ 7 billion during the Cup, FIFA wants the city of Sao Paulo to pass a law allowing privileged conditions for the sponsors to use billboards and other means of advertising during the 2014 event.

Mayor Kassab said that a Commission is studying the demand; one of the  Secretaries affirmed that violations of the laws will not be tolerated, but admitted that a law permitting exceptions during the Cup can be passed.

It’s difficult to say no to FIFA.

Sponsors that will be benefited: Coca-Cola, Emirates Airline, Hyundai, Sony and Visa. Don’t be surprised if you visit Sao Paulo during the World Cup 2014 and all the billboards you see carry these brands.

A note published in Brazilian portal Terra informs that FIFA and the Brazilian Government are having a dispute about tax exemptions.

One of the requirements of FIFA to choose a country to host the World Cup is that the Association be exempt of all taxes; according to the Ministry of Sports, this condition was accepted by the Brazilian Government.

However, now  Receita Federal (the powerful Brazilian Tax Service) affirms that the exemption would not be extented to FIFA’s contractors. The note says that Receita is studying limits to the tax rebates that the contractors will be allowed to claim; FIFA, however, wants the contractors to be fully exempted.

This brings to mind an infamous incident between Receita and the Brazilian Federation which happened in 1994, right after the Brazilian team returned from the winning campaign in the United States.

The Brazilian team was led by Ricardo Teixeira, President of CBF. Teixeira used the “clamor of Brazilian people to meet the heroes of the World Cup” as an excuse to not pass through customs; the customs staff felt the pressure and let them pass. The episode became known as “voo da muamba” (smuggle flight).

Later on, it was verified that many of the heroes illegaly imported stuf without paying taxes; Teixeira himself brought an equipment to produce beer, probably the most expensive product in the lot.

Teixeira and the Government have been fighting in courts since. Brazilian public opinion sided eventually with the Government, rather than with “the heroes”. Receita Federal seems to have very few reasons to be complacent with FIFA.

Update, April 24th 2010: the Minister of Sports informed that a law draft will be sent to Congress this month. Every tax exemption must be approved by the Congress. If the law is approved before December 31st 2010, FIFA and all contractors related to the World Cup 2014 will be tax exempted starting on January 1st 2011.

Update, May 26th 2010: the law was approved, as per FIFA requests.

On May 31st 2009, FIFA announced the 12 host cities of the World cup 2014 in Brazil.

The cities are:

1) Rio de Janeiro. Stadium: Maracana. Rio Travel Guide.

2) São Paulo. Stadium: Morumbi. Biggest Brazilian city.

3) Belo Horizonte. Beautiful Horizon.

4) Salvador. Party everyday.

5) Curitiba. Stadium: Arena da Baixada.

6) Porto Alegre. Stadium: Beira-Rio. The coldest of the host cities.

7) Brasília. The capital of Brazil.
Cuiaba. World Cup in the Pantanal.

9) Recife. World Cup by the beach.

10) Fortaleza. Stadium: Castelão. World Cup by the beach.

11) Natal. Stadium: Arena das Dunas. World Cup by the beach.

12) Manaus. World Cup in the Amazon.