Now let’s go to Rio 2016

There is another fever in Rio these days, since it was selected as one of the exotic and exciting new Olympic venues.  Brazil will host Latin America’s first Olympic Games in 2016, and is already gearing up for investment spending of over US$50 billion on facilities and infrastructure between 2010 and 2016.

Here are some highlights from a recent US Commerce Service report:

SPORT FACILITIES

Although more than half of Rio 2016 venues are ready, since Rio hosted the 2007 Pan American Olympic Games, about 20 new facilities are to be built. They include:

  • An aquatic sports stadium with 18,000 seats with an estimated construction cost of US$40 million.
  • An Olympic Park to host gymnastics, cycling, handball, and other sports competitions with an estimated building cost of US$200 million.
  • An Olympic village of 32 buildings with 12 floors each and a capacity of over 17,000 beds estimated at US$450 million.
  • An Olympic Tennis Center with 16 courts (US$45 million).
  • An arena in Copacabana for beach volley (US$7 million).
  • A renovated rowing stadium at Rodrigo de Freitas Lagoon will cost approximately US$2 million.
  • The renovation of Maracanã Stadium (where the opening and closing Olympic ceremonies will be held as well as soccer games) will cost approximately US$400 million, and must be completed before 2014 to use in the 2014 Soccer World Cup.

INFRASTRUCTURE

The estimated investment in infrastructure is about US$15 billion, including US$5 billion in logistics upgrades at seaports and airports.

The main projects include:

  • the modernization and enlargement of the two International Airport terminals (increasing the airport’s capacity from 15 million passengers per year to 25 million),
  • Highway widening,
  • construction of “Olympic lanes”,
  • the Port of Rio area revitalization to include a new 30,000 square meter leisure area featuring bars, restaurants, an amphitheater, a multi-use space and parking,
  • port dredging,
  • construction of two new subway lines,
  • the creation of a Bus Rapid Transit (BRT) system,
  • housing projects (including low income housing) and
  • Water sanitation.

While details of the technology investments are not yet available, these lists give an idea of the magnitude of the build-out, and an inkling of the opportunity for technology vendors.

The report also provides some recommendations for those companies interested in the bidding processes.  One note, government procurement processes require foreign companies to have a local representative to participate, at least legally or commercially.

MARKET ENTRY

  • Note that the Brazilian Constitution provides that all governmental purchases, at Federal, State and Municipal levels should be contracted through public tenders.  This is regulated by the Brazilian Bid Law (Law # 8,666, introduced in 1993).  Sales to the private sector are not subject to this Law.
  • Although the law forbids preferential treatment to Brazilian firms over foreign companies bidding for new projects, when local and foreign competitors offer equivalent conditions in terms of price, quality and delivery time, the Law ensures preference for: goods produced or supplied by a Brazilian firm of national capital; locally produced; and produced or supplied by Brazilian firms.
  • As most of the sporting facilities and urban infrastructure-related equipment and services will be acquired by governmental entities under Law 8,666 rules, note that foreign companies must have a local representative (commercial and legal) to participate in Brazilian government procurement tenders.

And, not to be forgotten is the upcoming FIF World Cup.  An upcoming virtual trade mission sponsored by the American Public Transportation Association will sponsor a series of webinars on investment opportunities.  The next is the series highlights preparations and opportunities around the upcoming FIFA World Cup in Brazil: FIFA World Cup in 2014 Creates New Opportunities in Brazil.

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