Bloomberg News

Brazil Urges Odebrecht to Cut World Cup Sao Paulo Stadium Cost

June 15, 2011

June 15 (Bloomberg) -- Brazil’s Sports Minister Orlando Silva said Odebrecht SA must charge at least 20 percent less than its $668 million estimate to build a Sao Paulo soccer arena that can host the opening game of the 2014 World Cup.

Odebrecht, Latin America’s largest engineering and construction company by revenue, said a new 65,000-seat stadium in Sao Paulo would cost 1.07 billion reais ($668 million), Silva said. The stadium should cost about 800 million reais, said Silva, 40.

“If we get Sao Paulo to move forward, the core problem is resolved,” he said in an interview at the Bloomberg office in Sao Paulo. “Sao Paulo is the city with the best conditions to host the opening of the World Cup. But it needs a stadium.”

Brazil is moving forward with a plan to expand airports and urban public transportation to prepare the nation to host the cup and the Olympic Games in 2016, said Silva, who has served as sports minister since 2006. Brazil should prioritize the airport infrastructure, International Olympic Committee President Jacques Rogge said June 14.

Investment in airports, stadiums, ports and urban transportation before the World Cup will total about 23 billion reais, Silva said. Most of the funding will come from the government.

Brazil’s state development bank committed to financing 400 million reais of the new Sao Paulo stadium which will be owned by the Corinthians soccer club. The city of Sao Paulo is planning a real-estate fund that would supply provide another 300 million reais in credit, the minister said. Government banks cannot provide any more funding, he said.

Odebrecht said in an e-mailed statement the stadium is matter to be resolved between the company and Corinthians over the next six weeks. Both parties aim to complete the stadium by December 2013.

--Editors: Robin Stringer, Adriana Arai

To contact the reporter on this story: Carla Simoes in Brasilia at csimoes1@bloomberg.net Joao Oliveira in Sao Paulo at joliveira4@bloomberg.net

To contact the editor responsible for this story: Francisco Marcelino at mdeoliveira@bloomberg.net


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