WORLDPOST
05/19/2014 03:36 pm ET | Updated May 22, 2014

Brazil's Lack Of Planning Poised To Hurt Country Even After World Cup Over

The current state of mass transit in Brazil is far from desirable. An initial plethora of promises and high expectations has given way to delays and the revelation of a characteristic Brazilian shortcoming: lack of planning. This lack of planning could also affect the country’s hotel infrastructure, which increased supply and now fears losses before, during and after the Cup.

According to estimates from the federal government, the World Cup will cost the public treasury somewhere around 26 billion reais ($11.6 billion). In an interview with Brasil Post, Gil Castello Branco, secretary general of the NGO Contas Abertas, said it was too early to consider it as the final cost, taking into account the recent history of public administration in the country. Data from the country’s public audit institute show that government inspections prevented the misappropriation of around 600 million reais ($272 million), but are not conclusive.

According to Castello Branco, one of the biggest disappointments is the failure to complete various mass transit projects in time for the event.

"The Matriz de Responsabilidades (Accountability Chart) projected 12 billion reais ($5.44 billion) just for transit projects, but 4 billion reais ($1.8 billion) disappeared from it when it became clear that those projects would not be ready in time. Today the estimate is of 8 billion reais ($3.6 billion), but this has caused a lot of frustration. We will only know the total cost of the World Cup when it is over, maybe next year, since there will be many last minute expenses such as temporary structures or communications, an area in which we have a profound deficiency," he said.

From the time Brazil was officially named the host of the World Cup by FIFA in 2007 to recent months, there was no shortage of suggestions for transport projects. The most pharaonic of these foresaw the construction of a bullet train to connect Campinas, Sao Paulo and Rio de Janeiro, but the project made ​​little progress beyond intentions, rumors and ideas. The same can be said about the subways in Salvador and Curitiba, or the possibility of building a monorail in Manaus. In general, these and other projects, not just in the area of transportation, were cut short in the absence of strategies and clear planning.

"Unfortunately, Brazilian managers are not able to think in advance of events, something that also occurred in the past. Before doing something, it is necessary to think, which means to plan. There is a lack of planning, for with planning you know exactly what you will get accurately, including the costs. With these in hand, the government agency that is hiring knows what to purchase and the supplier knows what to deliver," said the president of the National Union of Architecture and Engineering (Sinaenco), José Roberto Bernasconi.

A not-so-bright state of affairs

A recent survey conducted by Sinaenco revealed that in at least eight of the 12 cities that will host the World Cup there are projects underway expected to be completed between April and May, after they should already have been delivered. Thus, the tight schedule and the need to be ready in time for the World Cup will not allow for a period for tests and adjustments that would typically be required.

The situation is also critical when it comes to airports. Even though the federal government last week launched a strategic plan to manage the airport sector during the World Cup, the situation remains quite uncertain in some parts of the country. While talking with Brasil Post, the national president of the Association of the Hotel Industry (ABIH), Enrico Fermi, was walking through construction sites at the Confins Airport in the region of Minas Gerais. In his opinion, this is one of the sector’s major issues.

“Much was said about how the private sector would not participate, but it happened. What is really worrying is what the government promised and has not delivered."

At least nine of the 12 Brazilian airports that will receive a large number of supporters are still under construction, and many of them will not be ready for the World Cup -- a fact that even the federal government now admits, adopting the discourse that everything is being done "for the Brazilian people" without focusing solely on the World Cup. However, according to Bernasconi, there will only be actual improvements in the sector after a minimum period of ten years.

"It will take a while. Over the next ten years Brazil will improve its airport infrastructure, but this will not be because of the World Cup or the Olympics, but because we actually need it. We need greater efficiency. Today, Brazilian airports are at least 20 years behind. Anyone traveling abroad can see that everywhere in South America there are better airports than in Brazil,” he said, observing that there may be difficulties in traveling between airports, hotels and stadiums.

"Even if a holiday is declared on match days, as the mayor of Rio (Eduardo Paes) has suggested, there will be difficulties. You tend to have less demand for everyday spaces and public transport, since when people do not work, as on holidays, they stay at home or plan leisure activities that do not require transportation during peak hours, which include morning and late afternoon. This can lessen the demand for public transport and make life easier for those who come to see the World Cup games, but it’s not a certainty."

There are those who disagree, such as Ailton Brasiliense Pires, the president of the National Association of Public Transport (ANTP). For him, even if all the proposed works are not ready in time, the country is prepared to receive whoever comes.

"Tourists will have no problem accessing sites. The Corinthians stadium is close to both a subway line and a CPTM (Paulista Metropolitan Train Company) train line, something no other city has. In Rio, there is a subway station next to the stadium. In Porto Alegre, the Beira-Rio Stadium has always been far, and the subway line 2 will get you pretty close. As matches will be on Sundays or holidays, there will be no problem. Cities have dealt with this for decades. The Cup was indeed a good opportunity for cities to invest in the vicinity of the stadiums, improving mass transit.”

The hotel industry fears losses

In late January this year, Match, Fifa's partner company in the sales of hotel packages for the World Cup, cancelled 50 percent of the reservations made in 2007 and confirmed in 2010 with 840 Brazilian hotels.

Enrico Fermi criticized the federal government for raising doubts about the participation of the private sector in the World Cup -- "they said they would bring ships in to meet demand, things like that" -- and for not holding up its end of the bargain. As for the country’s hotels, the president lamented the lack of effort put into the training of personnel, a responsibility of the Ministry of Tourism.

Fermi also addressed criticism about high room rates during the World Cup in Brazil. Some of the main international media companies blamed hotel prices for their decisions to reduce staffing to cover the event.

"We have no comparative standards. The last World Cup in Brazil happened in 1950, there is no parameter. And Match has been FIFA's partner for 32 years; they would not hire bad hotels. They judged the rates were acceptable, so much so that they made a great number of reservations," he explained.

At this point, the president of the National Union of Architecture and Engineering (Sinaenco), José Roberto Bernasconi, sees some justification for the so-called law of supply and demand, which, economically, alters prices. However, he believes that some hotels may have overcharged and if so that decision could come back to haunt them later on.

"Those traveling across Brazil are already paying more for tickets. Flying is expensive in Brazil, as well as hotel fees. This does not only happen in Brazil. What can happen is that some of these decisions could prove excessive, end up killing future possibilities, scaring away people who might never come back again or just cancel."

The construction of new hotels throughout the country also brings another challenge: how to fill these rooms after the World Cup. Fermi says he truly believes in the strength of the domestic market, most notably business tourism.

"The construction of a hotel is not undertaken for a 40-day event, but after a study of the market and the potential return on a 30-year period. But we are convinced that the domestic market will benefit and will absorb these new rooms, and will adapt to the new environment," he added.

This piece was translated from Portuguese and originally appeared on Brasil Post.

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