Brazil
Brazil may be set to host the 2014 World Cup and the 2016 Olympics but reports have found that the country is still not on its way for its infrastructure and construction projects to be capable of hosting these events.
According to Reuters the setbacks have been deemed owing to bureaucratic red tape, industry corruption and a lack of leadership. It has been suggested that a reform from the Brazilian government on procurement laws may solve many of the construction problems.
An estimated that fewer than half of all the entire major construction projects have not been finished and there are worries that the cities of Rio de Janeiro and Sao Paulo may not be ready for 2014 to hold the Confederations Cup events as the 12 World Cup stadiums aren’t nearing completion and are behind schedule.
Dilma Rouseff, Brazils Prime Minister has gone so-far as recently revealing a system to speed up the implementation of construction projects which will instigate pressure on varying levels of government. This will involve evaluating the Brazilian federal, state and municipal government sectors.
The current plans in constructing the country’s infrastructure are concentrated in several major projects. The Fortaleza airport will experience major refurbishment construction work; the San Francisco River will undergo expansion as a means of providing water resources to the 12 million people in the surrounding area and the expansion of the Santos port, the country’s largest.
An investment of $187 million is being put into other port refurbishment and to fund the Rio de Janeiro Olympic Village. Plans have been put in place to build a hydroelectric plant in Porteiras, which is part of a $72 billion investment for new country wide hydro plants. Finally, a new bullet train travelling between Rio de Janeiro and Sao Paulo will be constructed at a cost of $19 billion. In order to upgrade the country’s airports $3.3 billion has been assigned but according to independent group Contas Abertas only 2% of this funding has currently been spent.
In order to finance the construction of airports and other infrastructure projects 98.5% of the $14 billion allocated for the projects will be reportedly sourced from Brazil’s public sector, this funding will be particularly dependent on finance from the state run BNDES bank which amongst other developments is believed to be used for the construction of highway roads and dams. In 2010 the bank lent three times as much than the World Bank, which amounted to $96 billion.
On top of this Brazil gained $13.3 billion from the Inter-American Development Bank (IDB). Any further funding stemming from private investment is experiencing challenges owing to no regulatory changes being made by the government. However, investment from America in projects is being encouraged.
Whilst these construction developments are being regarded as producing new and extensive opportunities for foreign investment in the country which will boost economic activity, the shortage in skilled workers, with the unemployment rate currently at 6%, believed to be an all-time low is also adding pressure to the mounting construction effort.
