Maracanã Stadium Concessions at Risk, Says Rio Governor

08/07/2013 - 09h01

Rio de Janiero's Governor Sérgio Cabral (PMDB) stated that he sees legal problems for the maintenance of Maracanã Stadium concessions after he suspended the demolition of three facilities in the vicinity of the venue: the Julio Delamare Aquatic Park, the Celio de Barros athletic stadium and the Friedenreich municipal school.

In an interview with television news show "SBT Rio", the governor said he didn't believe that the new model is economically viable for the Maracanã Entertainment Complex Inc. consortium, which manages the stadium. The company said, however, "it will submit an alternative for the feasibility and continuity of the grant."

"They have 20 days to say whether the contract remains standing. I don't think it will. There is a legal aspect as well that is too difficult to maintain," he said. Governor Cabral's statement revealed a discussion that took place in government. For some, the changes in the project voided the bids that were made for managing the arena, which yesterday signed a deal with Brazilian football team Botafogo to have its games on the stadium for 35 years.

The consortium has pledged to invest R$594 million (about US$258 million) in construction and pay R$5.5 million (US$2.4 million) in annual grants. Without the demolition and construction of new venues, the conditions of the dispute shift.

The Federal Prosecutor had already filed a lawsuit seeking an annulment of the concession before Governor Cabral backed down. Now, prosecutors question the validity of the economic feasibility study that had been done to support the bidding of stadium concessions. In an analysis of those following the actions of the Prosecutor, the setbacks aggravate the grant situation.

As the economic feasibility study did not analyze the scenario without the demolitions, the edict would no longer be valid, as well as the competition that it generated. More competitors could take an interest in the new project.

According to what Folha has learned, Cabral urged that he give positioning on the case. The intention is to evaluate the impact of maintenance or non-concession.

Translated by STEVE HUGHES

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