FIFA Distances Itself From Corruption Claims at World Cup Arenas
(Bloomberg) -- Soccer’s governing body FIFA has distanced itself from the construction of stadiums used in the 2014 World Cup in Brazil after investigators in the country alleged that at least half were built on the back of corrupt contracts.
Building companies and local government officials rigged the tender process that led to certain firms being picked to build the arenas in return for kick backs, according to allegations made as part of plea bargains by executives of Odebrecht SA, the Brazilian construction giant that’s at the heart of a nationwide graft scandal. That resulted in building costs becoming vastly more expensive than initially planned.
Upgrades to Rio’s Maracana stadium, where Germany beat Argentina in the final, ended up costing more than $300 million, a third more than the $200 million estimate. The cost of the whole tournament was about $3 billion, several times over budget.
FIFA, which is battling to regain its own reputation following a 2015 corruption scandal that took out most of its management and led to stinging criticism from fans and sponsors, said it had nothing to do with the stadium projects, even though they were designed to meet its specific requirements for the World Cup.
“The procurement of such services were under the sole discretion and control of the respective stadium authorities without any influence or control of FIFA," the soccer body said in an emailed response to questions on Thursday. “FIFA expects that all parties involved in the organizing and hosting of FIFA competitions follow local laws and regulations."
An “absurd” $300 million was spent on Sao Paulo’s Corinthians Arena, which staged Brazil’s tournament opener against Croatia, compared with an estimated cost of about $100 million, according to testimony from Odebrecht’s jailed former Chief Executive Officer Marcelo Odebrecht. The price was agreed at a dinner with high-ranking politicians, he said. Brazil’s top court also indicated stadiums in Recife, Fortaleza and Brasilia, the most expensive venue, featured irregularities.
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FIFA requested Brazil select between eight and 12 stadiums to host sport’s most-watched event. Brazil picked the higher number, with almost all of the costs being met by the public purse even though former President Luiz Inacio Lula da Silva said they would be entirely privately funded.
Several of the stadiums now suffer from financial difficulties and low use, including the one in Brasilia, a city which doesn’t have a soccer team in the top division. The 72,000 capacity Mane Garrincha stadium, which at the time of construction was the second most-expensive in soccer, has been used as a bus depot.
“Each host country also has to design their stadiums in such a way that allows them to be used in a sustainable manner over the longer term,” FIFA said in a document issued before the tournament.