The cost of building Brasilia's World Cup stadium has nearly tripled to $900 million in public funds, largely due to allegedly fraudulent billing. The spike in costs has made it the world's second-most expensive soccer arena, even though the city has no major professional team.
Mane Garrincha stadium, which boasts 288 imposing concrete pillars holding aloft a high-tech self-cleaning roof, has become the costliest project related to Brazil's $11.5 billion World Cup. Critics call it the poster child for out-of-control spending and mismanagement, or worse.
The financial links between construction firms and politicians add to deep suspicions among Brazilians that preparations for soccer's premier event beginning next month are tainted by corruption, raising questions about how politicians who benefit from construction firms' largesse can be effective watchdogs over billion-dollar World Cup contracts. Anger over perceived corruption helped fuel huge protests last year, and there are fears more unrest could mar the Cup.
In a 140-page report on the stadium, the auditors found $275 million in alleged price-gouging — and they have only examined three-fourths of the project. They forecast that fully one-third of the stadium's cost may be attributable to overpricing, the largest single chunk of $500 million in suspect spending auditors have flagged in World Cup construction projects so far.
Federal prosecutors say as yet no individuals or companies face corruption charges related to World Cup work, but it could take years for official audits to be finalized and judged by civil courts, a required step before any criminal charges are filed. There are at least a dozen separate federal investigations into World Cup spending.
The price of building or refurbishing the 12 arenas alone has nearly quadrupled from initial estimates, helping make Brazil's World Cup the priciest yet.
Funding for Brasilia's stadium — whose cost among soccer venues is topped only by England's Wembley Stadium — relies solely on financing from the federal district's coffers, meaning every cent comes from taxpayers. The auditors' report found instances of what appears to be flagrant overpricing.
For instance, the auditor's report says transportation of prefabricated grandstands was supposed to cost just $4,700 — but the construction consortium billed the government $1.5 million. The consortium is made up of Andrade Gutierrez, a construction conglomerate, and Via Engenharia, an engineering firm.
The steel to build the arena represented one-fifth of total expenses, and auditors say wasteful cutting practices or poor planning added $28 million in costs, the single biggest overrun uncovered so far.
The audit questions why the consortium had to discard 12 percent of its steel in Brasilia when Andrade Gutierrez, using the same cutting methods, lost just 5 percent of steel at another stadium it helped build in the Amazon city of Manaus and virtually none at a Cup arena in Cuiaba.
Another $16 million was lost when Brasilia's government inexplicably failed to enforce a fine against Andrade Gutierrez for a five-month delay in completion of the main portion of the stadium.
Auditors also say they spotted $2.3 million worth of materials that were simply listed multiple times on bills.
In a poll last year, three-fourths of respondents said the World Cup construction has been infused with corruption.
Such beliefs fuelled widespread and often violent anti-government protests last June that sent more than a million Brazilians into the street during FIFA's Confederations Cup soccer tournament, the warm-up event to the World Cup. Many protesters railed against corruption and the billions spent to host the events.
The distrust isn't surprising in a nation where 40 percent of federal congressmen have criminal cases pending against them before the country's highest court.
The overall price of the 12 stadiums has jumped to $4.2 billion in nominal terms, nearly four times the estimate in a 2007 FIFA document published just days before Brazil was awarded the tournament. At the time, leaders also promised the stadiums would be privately funded.
Critics say four of the stadiums will become white elephants after the tournament because they are in cities that cannot support them.