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Infrastructure for the community and high-performance athletes
• Between 2003 and Jun/10, R$ 2.9 billion were invested in more than 12,500 contracts for the renovation or construction of new facilities. About R$ 1 billion was invested in 2010 alone in the implementation and upgrading of sports infrastructure, including 5,220 sports courts, gyms (1,307), stadiums (836), Olympic villages (33), sports complexes (384), football fields (683), track and field (72), and Youth Squares (192) among others. 4,134 works have been
completed and another 1,851 have been started or are under way.
2014 World Cup Opportunities Beckon Foreign Investors to Brazil
SOURCE – ARTICLESBASE -Thomas Rideg, Managing Director for Global Intelligence Alliance Latin America
Ahead of the World Cup in 2014, Brazil’s government has approved nearly $3 billion to expand and renovate 16 airports, and guaranteed another $400 million in investments related to the country’s ports. The allocations come amid criticism from soccer’s international governing body, FIFA, that Brazil is not meeting its infrastructure obligations in advance of the tournament. What are some opportunities that may trickle down to international companies?
Thomas Rideg, Managing Director for Global Intelligence Alliance Latin America gives us his views.
Will Brazil host a better World Cup than South Africa?
“Brazil will host a successful World Cup. This is a country accustomed to hosting major local and regional soccer tournaments. Combined with a population that breathes the sport and its current economic strength, it should have no excuse not to host an even more successful World Cup than South Africa, as long as it makes timely investments in infrastructure. Although a bit late, these investments are already in place.
There is a classical Brazilian way of doing things and the reason why Brazil has the unpopular reputation of being “o pais do jeitinho” (meaning: the country that somehow or other gets things done). Home to an ever-increasing population and skilled workforce with a rare combination of enthusiasm and creativity, Brazil also has the downside of bureaucracy, procrastination, and corruption.
Bureaucracy is the first painful stage before getting anything done here. Once that is overcome, things will flow and Brazil will positively surprise international spectators when it comes to making many of the necessary investments to host the World Cup.
The investments will never satisfy the local population, however. Many understandably point out that the resources destined to improve stadiums, hotels, ports and roads to host a 30-day event should instead be concentrated on public services. Services such as health and education have seen improvements over the years but still reflect conditions of underdevelopment in certain areas. The local population is also very skeptical regarding the accurate destination of the funds allocated to the specific investments required, as corruption is feared to permeate this type of process.”
How are concerns about the country’s infrastructure being addressed?
“The most urgent improvements are the ports – which is currently being addressed – and the airports. Brazil has been facing “airway chaos” for around three years. In the first semester of 2010, domestic air travel increased by 30% and international travel increased 13.5%.
Regardless of the World Cup or Olympics, the ANAC (National Agency of Civil Aviation) has announced that it will not approve any increase in the number of flights until airports are expanded.
Having said this, plans for airport expansions have been in discussion prior to FIFA´s obligations. Infraero, the government-run airport administration, has already announced that it will be investing R$ 6.5 billion across 16 Brazilian airports, including the 12 that will be key to receiving tourists for the World Cup. Infraero may also soon be up for privatization, and if this is the case, more fluidity shall be seen in these improvements.
Roads have also been a major problem. The gradual improvements seen throughout the years have been through the privatization of some of Brazil’s most important highways.”
How much investment will the World Cup attract?
“Investments related to the 2014 World Cup are estimated to surpass R$ 140 billion.”
Which are some industries that will be targets of new foreign investors?
“It is hard to think of areas that will not be targets of direct or indirect investments by foreign investors.
One of the main areas of investment will be in information technology and communications. We’ll have international tourists coming into the country with different technologies such as 4G, local tourists demanding roaming services, stadiums demanding security monitoring and the need for high speed networks for image transportation, traffic control systems and countless other applications. The industry is expected to attract more than R$ 20 billion in investments – most of which will be in the hands of established players but also within the aim of potential foreign entrants.
Hotels, convention centers and restaurants will also be areas of investment. Here, we are talking about potential investment across 12 cities, a number with completely different stages of development, local cultures and climates. Let’s take Manaus for example. It is one of the warmest and most humid cities in the country and has an informal atmosphere. By comparison, Curitiba is one of the coldest and driest cities and has a conservative and European-like culture. This means that the forms and areas of investments within the hospitality sector can vary intensely from city to city.
Large infrastructure projects for roads, tunnels, airports and stadiums are on the rise, so we will also see interest from companies involved in construction equipment, such as road building machines, cranes and aerial working platforms, as well as those involved in outdoor illumination projects, transport, logistics etc.
Foreign companies with an edge in safety and sustainability are sure to find their niche in preparation for the World Cup, as both these areas are of increasing priority in the country.”
What advice would you give foreign investors?
“Firstly, make sure you understand your key attraction: the market. Huge differences exist across the country and across different socio-economic segments. Consumers are more demanding as a consequence of becoming more exposed globally. At the same time, Brazilians are unique and like to be perceived and treated as such, so large generic mass offerings may not always work.
Although Brazil is a continental country with huge differences across all its six regions, big differences can also be seen within the regions themselves. For example, Rio and São Paulo are only 40 minutes apart by airplane; yet they differ in terms of culture, lifestyles and work habits. The two cities are also home to different industries. São Paulo is an evolving fast paced cosmopolitan melting pot while Rio, though a huge city and former national capital, has preserved some of its more traditional cultural characteristics.
Secondly, though the market may be huge and full of opportunities, one should not underestimate the local and established players. Depending on the industry, many world-class players may already be servicing the market with state-of-the-art offerings. Understanding these competitors; where they are based, how long they have been in the market, how and where they distribute for example, is very important in getting an idea of your competitive challenges.
Thirdly, understand the country in terms of its regulations, tax obligations and administrative requirements. Go beyond a general understanding as such obligations or incentives can change from region to region and differ from industry to industry.
Fourthly, be patient. Some companies get excited when they see an opportunity, such as a notice for a huge public bid but they could end up finding the process of bidding to be extremely complex and bureaucratic. It is still important to establish connections in certain geographies and sectors.
Procurement and timetable
Projects related to the 2014 Brazil FIFA World Cup are coordinated by each of the 12 host cities state & municipal governments. Federal government is also involved in major infrastructure areas that are already part of the national development plan (PAC). Investments to build and reform stadiums in the 12 host cities will be around US$5.7 billion; and projects should consider an entire revitalization of stadium’s surrounding area in order to leave a legacy to the city.
The national commercial air traffic should double until 2014 and US$3.3 billion will be invested in airport infrastructure and modernization in the 12 host cities to attend the estimated demand. Large investments will also be made in hotel accommodation, ports infrastructure, tourism, training and security, since estimated number of tourists during the event is 500,000. All host cities will have to expand their hotel network to accommodate estimated number of visitors.
An estimation of US$11.5 billion will be invested per year in the next 5 years in telecommunications infrastructure (fixed line network expansion, broadband Internet and 3G mobile high-speed networks implementation).
The 2016 Rio Olympics project is coordinated by Federal, State and City governments as well as by the Brazilian Olympic Committee through the Rio 2016 Organizing Committee but most of the efforts and decision power will be concentrated at city government level. Major decisions on the projects and companies to participate will be made from April/May 2010 with the consolidation of the Rio Organizing Committee and the creation of the Rio Business Office which will concentrate all the investments opportunities related to the World Cup and Olympic Games as well as other development plans for the city and state.
Estimated annual impact in the Brazilian GPD is US$11 billion (2009 to 2016) and US$13.5 billion (2017 to 2027) and the planned investments should result in 121,000 new direct and indirect employees per year (2009 to 2016) and 131,000 per year (2017 to 2027). The sectors of the Brazilian economy that will best benefit from the games will be:
• civil construction (10.5%) real state & rental services (6.3%) logistics (4.8%)
• business services (5.7%) oil & gas (5.1%) telecommunication services (5%)
Tourism in the city of Rio de Janeiro should increase 15 per cent in 2016 in relation to the previous year and the city of Rio will have to extend its hotel accommodation capacity up to 50,000 hotel rooms. The strategic regeneration of Rio’s historic Port area will be accelerated, resulting in a major new accommodation, entertainment and tourist district reconnecting the harbour to the rest of the city.
The city will have 4 clusters with specific needs and solutions (Barra, Deodoro, Maracana and Copacabana) and 11 permanent and 4 temporary sport installations will be constructed plus modernisation of existing ones with estimated budget of US$508 million. A BRT (Bus Rapid Transport) system will be implemented in the city to connect the planned clusters as well as modernisation and extension of metro lines with a total estimated cost of US$2.6 billion.
The remediation of Rodrigo de Freitas & Barra Lagoons and Guanabara Bay are also a priority that has an estimated cost of US$565 million.
Latest news and updates on the procurement processes can be found at:www.brazil2014-rio2016.com
Finally, be persistent. Brazil is bureaucratic and can have a frustrating degree of centralization. These however, are only bottlenecks and are certainly not barriers. The country is huge, the
Brazil Major Sport Events 2014 & 2016 – News & Opportunities
Small business hoping to be the winner at 2014 Cup
A recent study by two of Brazil´s top business researchers has predicted that the 2014 World Cup will have an impact on 448 types of economic activity and generate 700,000 jobs, 400,000 full time and 300,000 part time.
The report, by Sebrae, the government body dedicated to small business, in collaboration with private university and research institution Fundação Getúlio Vargas, covers the impacts of the Cup on the Brazilian business sector, and is accompanied by a commitment by the organisation of R$79.3 million over the next three years to assist small and medium businesses in accessing the opportunities.
The report also identified a range of areas offering the most opportunities, including: tourism agencies, uniform suppliers, earthworks specialists, restaurants and bars, and IT and communications businesses. Beyond these, the organisation has committed to additional research on five other key sectors: agribusiness, wooden furniture, textiles and design, retail commerce and services.
Sebrae stated that their idea is to gain more space in the economy for small business, not only for the 2014 Cup but well into the future. Presently, while 99% of Brazilian businesses are considered small they account for just 20% of the country´s GDP.
For the Cup alone, the establishment of 7,700 new business ventures has already been predicted fort the 12 host cities.
Posted by Simon Tarmo- http://www.brazil2014-rio2016.com/2011/04/small-business-hoping-to-be-winner-at.html April 8, 201
2014 BRAZIL FIFA WORLD CUP AND 2016 RIO OLYMPIC GAMES
Main organizations involved
Brazilian Olympic Committee (COB)
Founded in 1914, COB has the responsibility of spreading sports culture within the Brazilian society and helping developing high performance athletes.
Rio 2016 Organizing Committee
Rio 2016 Organizing Committee is made up of a team of professionals from diverse areas (former Olympic athletes, international advisors and renowned consultants) with expertise in the organization of major sports events. Key members of the Rio 2016 team also worked on Rio 2007 Pan American Games.
Rio Business Office
Identify, concentrate and coordinate business and investments opportunities related to the 2016 Olympic Games in the city of Rio de Janeiro is the main purpose of this project. The office will also support road shows and business missions to promote the city and its demands.
Brazilian Ministry of Sports
The Ministry of Sports is responsible to create a national sports policy, develop high performance athletes and work on activities to provide social inclusion through sports, therefore contributing to the welfare of the Brazilian population.
Brazilian Football Confederation (CBF)
The CBF coordinates everything that is related to professional soccer being responsible of the organization of the national championship under it’s varies leagues; players transfers and regulations; as well as managing, training and administrating the Brazilian national soccer team in all of its categ
