Grand Visions Fizzle in Brazil
Brazilians headed home past the
abandoned station for a cable car meant to go to their hilltop favela in
Rio de Janeiro. The mayor rode in the $32 million cable car in 2012,
but it hasn’t functioned since.
Credit Daniel Berehulak for The New York Times.
“The fiascos are multiplying, revealing disarray that is regrettably systemic,” said Gil Castello Branco, director of Contas Abertas,
a Brazilian watchdog group that scrutinizes public budgets. “We’re
waking up to the reality that immense resources have been wasted on
extravagant projects when our public schools are still a mess and raw
sewage is still in our streets.”
The growing list of troubled development projects includes a $3.4
billion network of concrete canals in the drought-plagued hinterland of
northeast Brazil — which was supposed to be finished in 2010 — as well
as dozens of new wind farms idled by a lack of transmission lines and
unfinished luxury hotels blighting Rio de Janeiro’s skyline.
Economists surveyed by the nation’s central bank see Brazil’s economy
growing just 1.63 percent this year, down from 7.5 percent in 2010,
making 2014 the fourth straight year of slow growth. While an economic
crisis here still seems like a remote possibility, investors have grown
increasingly pessimistic. Standard & Poor’s cut Brazil’s credit
rating last month, saying it expected slow growth to persist for several
years.
Long stretches of the Transnordestina
railway in northeastern Brazil, begun in 2006, lie deserted. The project
has dislocated villagers, who have not been paid for their destroyed
land.
Credit Daniel Berehulak for The New York Times
Making matters tougher for the government, it is an election
year, with a poll last month showing support for President Dilma
Rousseff’s administration falling to 36 percent from 43 percent in
November as sluggish economic conditions persist.
Ms. Rousseff’s supporters contend that the public spending has
worked, helping to keep unemployment at historical lows and preventing
what would have been a much worse economic slowdown had the government
not pumped its considerable resources into infrastructure development.
Luiz Inácio Lula da Silva, Ms. Rousseff’s political mentor and
predecessor as president, put many of the costly infrastructure projects
into motion during his administration, from 2003 to 2010. In a recent
interview, he acknowledged that some of the ventures were facing long
delays. But he contended that before he came into office, Brazil had
gone for decades without investing in public works projects, so the
country essentially had to start from scratch.
“We stayed for 20 years without making or developing any public
infrastructure projects,” Mr. da Silva said. “We had no projects in the
drawer.”
Still, a growing chorus of critics argues that the inability to finish big infrastructure projects reveals weaknesses in Brazil’s model of state capitalism.
First, they say, Brazil gives extraordinary influence to a web of
state-controlled companies, banks and pension funds to invest in
ill-advised projects. Then other bastions of the vast public bureaucracy
cripple projects with audits and lawsuits.
Federal money went to build an
extraterrestrial museum in Varginha, in southeast Brazil, where
residents claimed to see an alien in 1996. Stray dogs now shelter in its
rusting carcass.
Credit Daniel Berehulak for The New York Times
A tall viewing platform, designed by
the famed architect Oscar Niemeyer, looms over a park in Natal, Brazil,
that was inaugurated in 2008 but was soon abandoned.
Credit Daniel Berehulak for The New York Times.
“Some ventures never deserved public money in the first place,” said Sérgio Lazzarini,
an economist at Insper, a São Paulo business school, pointing to the
millions in state financing for the overhaul of the Glória hotel in Rio,
owned until recently by a mining tycoon, Eike Batista. The project was
left unfinished, unable to open for the World Cup, when Mr. Batista’s business empire crumbled last year.
“For infrastructure projects which deserve state support and get it,”
Mr. Lazzarini continued, “there’s the daunting task of dealing with the
risks that the state itself creates.”
The Transnordestina, a railroad begun in 2006 here in northeast
Brazil, illustrates some of the pitfalls plaguing projects big and
small. Scheduled to be finished in 2010 at a cost of about $1.8 billion,
the railroad, designed to stretch more than 1,000 miles, is now
expected to cost at least $3.2 billion, with most financing from state
banks. Officials say it should be completed around 2016.
But with work sites abandoned because of audits and other setbacks
months ago in and around Paulistana, a town in Piauí, one of Brazil’s
poorest states, even that timeline seems optimistic. Long stretches
where freight trains were already supposed to be running stand deserted.
Wiry vaqueiros, or cowboys, herd cattle in the shadow of ghostly
railroad bridges that tower 150 feet above parched valleys.
Children played soccer, left, at the
abandoned cable car station in Rio, built on their old playground. In
the northeast, right, a deserted house sat in the shadows of pillars of
the Transnordestina railway.
Credit Daniel Berehulak for The New York Times.
“Thieves are pillaging metal from the work sites,” said
Adailton Vieira da Silva, 42, an electrician who labored with thousands
of others before work halted last year. “Now there are just these
bridges left in the middle of nowhere.”
Brazil’s transportation minister, César Borges, expressed
exasperation with the delays in finishing the railroad, which is needed
to transport soybean harvests to port. He listed the bureaucracies that
delay projects like the Transnordestina: the Federal Court of Accounts;
the Office of the Comptroller General; an environmental protection
agency; an institute protecting archaeological patrimony; agencies
protecting the rights of indigenous peoples and descendants of escaped
slaves; and the Public Ministry, a body of independent prosecutors.
Still, Mr. Borges insisted, “Projects get delayed in countries around the world, not just Brazil.”
Mr. da Silva, who oversaw the start of work on the Transnordestina
eight years ago, was frank about the role of his Workers Party, once the
opposition in Brazil’s National Congress, in creating such delays. “We
created a machinery, an oversight machinery, that is the biggest
oversight machinery in the world,” he said, explaining how his party
helped create a labyrinthine system of audits and environmental controls
before he and Ms. Rousseff were elected.
“When you’re in the opposition, you want to create difficulties for
those that are in the administration,” Mr. da Silva said. “But we forget
that maybe one day we’ll take office.”
A young vaqueiro tended cows below an
abandoned Transnordestina railway bridge. The stalled railroad was
considered necessary for transporting soybean harvests to port.
Credit Daniel Berehulak for The New York Times
Some economists contend that the way Brazil is investing may
be hampering growth instead of supporting it. The authorities encouraged
energy companies to build wind farms, but dozens cannot
operate because they lack transmission lines to connect to the
electricity grid. Meanwhile, manufacturers worry over potential
electricity rationing as reservoirs at hydroelectric dams run dry amid a
drought.
Other public ventures sit vacant. Officials in Natal,
in northeast Brazil, spent millions on wavy buildings designed by Mr.
Niemeyer, opening them in 2006 and 2008. But they abandoned them almost
immediately, allowing squatters to occupy some areas; the authorities
now say they have plans to refurbish the buildings. Another Niemeyer
project, a $30 million television transmission tower in Brasília designed like a futuristic flower, remains unused two years after it was inaugurated.
Then there is the extraterrestrial museum in Varginha, a city in
southeast Brazil where residents claimed to have seen an alien in 1996.
Officials secured federal money to build the museum, but now all that
remains of the unfinished project is the rusting carcass of what looks
like a flying saucer.
“That museum,” said Roberto Macedo, an economist at the University of
São Paulo, “is an insult to both extraterrestrials and the terrestrial
beings like ourselves who foot the bill for yet another project failing
to deliver.”
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