Brazil World Cup roundup

Brazil World Cup roundup

Brazil is expecting 600,000 foreigners and about 3 million local visitors travelling through the 12 host cities and the rest of the country next June, when it will host the World Cup for the first time since 1950. Brazil is preparing 12 new and renovated stadiums for next year's World Cup, at a cost estimated at $US3.5 billion.

The World Cup and the Olympics in Rio represent great opportunities for trade and investment, not only for the city but also within the state. The same applies to Sao Paulo and other World Cup host cities. A study by the Foundation GetulioVargas suggests that the two events will inject US$142 billion into the Brazilian economy and generate more than 3 million jobs per year.

We have previously reported on the status of new and refurbished stadia, here and in our newsletter, “Back on the Block”. In short, most will be ready…just…in some form or other for the 2014 competition, however, several are well behind construction schedules. Moreover, the nature of Cup-time operations and who will manage those fully as well as the later post-event stadia operations are unclear and in some cases are a brewing dispute. The presidential and city elections around the country in 2014 compound the uncertainties.


Much investment is being pushed into transport infrastructure. A number of airport projects are underway but are unlikely to be even part ready to much alleviate the bottlenecks that already occur. Construction of light-rail projects in eight of the World Cup host cities is under way, or is expected to be completed by the opening. Rio will expand its metro, adding a third line to its two existing ones that will reach into Barra de Tijuca—the site of most of the Olympic events. One of the three additional Bus Rapid Transit (BRT) lines is already functioning.


Soccerex Convention

The cancellation of the Soccerex Global Convention, set to open on 30 November in Rio, came as shock to many and has stimulated concerns about the decision making and real state of preparations of much related to the World Cup. We have published recently the story about Soccerex. Adidas, Brahma, Gatorade, Panini and Unimed are some of the major brands that had committed to attend this year’s Soccerex Global Convention which had been moved to the Maracanã stadium in Rio de Janeiro at the Rio city government’s behest.  Other believed to have planned attending included Bridgestone, Petrobras, Nokia, Google, Sony, Panasonic, Chevrolet, LG, Oi and Vivo – seeking to network and do business with the football industry. Now for all the legal action.


Hotels are scarce and pricey

Brazil's justice ministry is asking the main hotel chains in the country to explain the high prices being charged for rooms during the 2014 World Cup. The request comes after several complaints from consumer advocates and a study by the country's tourism board which showed that exorbitant prices will be charged during the month long tournament next year.

Among the companies notified by the ministry's consumer rights secretariat are Accor, Choice, Louvre, Blue Tree, Nacional Inn, Wyndham, IHG and Bourbon. The Brazilian Association of the Hotel Industry also was notified.

The ministry required a 48 hours response…we’ll see.

"Tourists are consumers which require special protection because they are outside of their city or country," Amaury Oliva, director of the ministry's consumer rights secretariat, said in a statement. "We are working to make sure that they are well received and that the services we provide have quality and fair price."The ministry said it wants the hotel chains to provide the average rates charged in the past during other high-demand events in the 12 World Cup host cities, so they can be compared to the prices for the tournament.” 

Brazil has said it will not try to control market prices. Sports Minister Aldo Rebelo warned that hotels that raised prices excessively would feel the "heavy hand" of the law, adding that consequences included possible hotel closures.


It is estimated that Rio can accommodate some 52,000 tourists, across all accommodation categories. Beyond building more hotels, the gap will be partly covered by berthing six cruise ships—adding 10,000 rooms—in the port during the World Cup. To accommodate the ships, the port is being revamped, but work is delayed…and only some of the planned works will probably be ready by May 2014—just ahead of the opening match.


At the same time Brazil Government agencies monitoring the prices of goods and services around the World Cup have slammed airlines for pricing up airfares during the Cup by up to 1000%. They are demanding those prices be reduced….



FIFA has revealed that 72% of the 889,303 tickets bought in the first phase of ticket sales had gone to Brazilians with 9% of the total going to English fans. In the next sales window, 228,959 tickets went on sale on 11 November on a first come, first served basis. The final phase of ticket sales will begin on 8 December.


Meantime… Brazilian prosecutors are suing FIFA for reimbursement of public funds spent on temporary structures in stadiums that will host next year's World Cup. They contend that the money was spent on temporary structures in or near stadiums during the Confederations Cup in June this year, the warm-up tournament to the World Cup… but that the structures didn't serve the public interest. It is stated that the temporary structures were set up exclusively for the benefit of FIFA's sponsors, broadcasting services and guests. And accordingly, Brazilian taxpayers shouldn't be asked to pay for them.

Prosecutors' offices in five states said in statements posted on their web pages that they're seeking reimbursement totalling $US106 million.

FIFA has responded that the payment for the "complementary structures" is contractually the responsibility of stadium owners and not FIFA.  Read into this quite lack of clarity about stadium ownership, funding, rights and responsibilities.


Doping tests will not be done in Brazil

World Anti-Doping Agency (WADA) president John Fahey says that FIFA will need to use a doping testing laboratory outside of Brazil for next year's World Cup. The country’s testing laboratory – based in Rio – had its accreditation revoked by WADA in August, and is unlikely to be reinstated before Brazil’s hosting of the World Cup in June and July. The lab was also suspended for nine months in 2012 before being reinstated.

FIFA has been left with no other option than to fly the samples outside of the country, and will face the logistical challenge of having blood samples tested within the required 36 hours. It is proposed that sample testing…this may be all testing…will be done in Lausanne, Switzerland. Let's hope the airports in Brazil function adequately.

The nearest WADA accredited labs are based in Colombia, Cuba and Mexico.


Brazil’s football debts

Brazilian football clubs are expected to sign an agreement with the government, which will manage their debt repayment. Professional clubs in the country owe over US$2 billion in debt to the government, mostly through unpaid taxes – according to Bloomberg. The guidelines would allow debts to be repaid to the government over 15 to 20 years, however, they also include provisions such as football league point deductions or relegation.


Stadium technology

Ruckus Wireless has been selected by a consortium of four Latin America mobile network operators, including Claro, Oi, Telefónica, and TIM, to supply advanced indoor/outdoor Smart Wi-Fi products and technology that will be used as the foundation for offering pervasive, high-speed wireless access within two of Brazil’s largest soccer stadiums: Estádio Nacional de Brasília (formerly known as Estádio Mané Garrincha), the 71,000-seat stadium in Brasília, and Arena Octávio Mangabeira (also known as Arena Fonte Nova), the 50,433-seat stadium located in Salvador.

Brazil’s World Cup organising committee intends to make World Cup 2014 the first ‘digital’ world cup.

Eric Winton

Director, New Millennium Business

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