Rail, riots and results
The idea of Brazil losing the right to host next year’s 2014 FIFA World Cup became a real possibility this summer after protests broke out across the country. Construction Machinery Middle East asks what can the industry and Qatar learn from Brazil?
One million people took to the streets as Brazil’s golden shirted football players participated in the Confederations Cup, a tournament intended as a curtain raiser.
The idea of Brazil losing the right to host next year’s 2014 FIFA World Cup became a real possibility this summer after protests broke out across the country over the rising cost in the standard of living and the amount of money being spent on a sporting event when millions are still living in poverty. Celebration of the world’s biggest sporting event has been short-lived for its citizens.
One million people took to the streets as Brazil’s golden shirted football players participated in the Confederations Cup, a tournament intended as a curtain raiser.
“With regard to the World Cup, I want to clarify that the federal money spent on the stadiums is in the form of financing that will be duly repaid by the companies and governments that are exploiting these stadiums,” said Brazil’s president Dilma Rousseff. “I would never allow these funds to come out of the federal public budget or to damage priority sectors such as health and education.
“It is also imperative that I mention a very important topic that has to do with our Brazilian soul and our manners. Brazil, the only country to have participated in every World Cup and a five-time world champion, has always been very well received everywhere,” she added.
“We must give our friends the same generous welcome we have received from them – with respect, love and joy. This is how we must treat our guests. Football and sport are symbols of peace and peaceful coexistence among peoples. Brazil deserves to, and will, host a great World Cup.”
2014 World Cup, FIFA general secretary Jerome Valcke has terse in his response to suggestions that the tournament, which comes two years before the country hosts the Olympic Games, had been given to a country that should be upgrading its social infrastructure not its stadia.
Speaking at the FT/IFA Business of Football Summit in Rio de Janeiro, he said the $3.3 billion (a fraction of the $120 billion budget for the 2022 tournament in Qatar) price ticket was well worth spending.
“We need a big setting for the opening ceremony and the final. The rest is up to the country to provide at their discretion. FIFA is not asking countries to host the World Cup, countries are bidding for it. We issue a tender and that has requirements. We have asked for new technology to be included, that is true. But there seems to be this feeling that when it is for the FIFA it is always bad. Building and renovating stadia and upgrading infrastructure needs large sums of money and a big workforce.”
Brazil is using the World Cup and Olympics to upgrade its essential infrastructure such as roads and rail to make its economy for efficient. It is also using the promote the country as private investment golden egg and announced plans to raise $66 billion to fund its road and rail projects. However high taxes, red tape and run-down infrastructure make Brazil an expensive place to do business.
The construction machinery industry has been one of the undoubted beneficiaries from Brazil’s spending so far. There is now a long list of companies that are using the country as a firm foundation to tackle the Latin American market.
As it searches for private money, the onus rests on the government to buy equipment. For instance, March saw it place an order for 1,000 backhoes from JCB in a deal valued at $60 million. JCB and Manitowoc have both opened facilities in the last year and are joined by an all-star line-up of companies in the market including: Caterpillar, CNH Global, JLG Industries, Komatsu and Volvo AB. Other companies such as Bobcat, Dynapac Compaction Equipment, Liebherr Group, Proton, Randon Construction, and Sany Group.
XCMG has also invested in a $200 million manufacturing facility, “catching the opportunity of the infrastructure construction of World Cup and Olympics to expand the sales system and technical support in Brazil”.
One of the key factors contributing to this market growth is the need to reduce infrastructure construction time, says analyst Research and Markets.
The construction equipment market in Brazil has also been witnessing an increase in the adoption of construction equipment on a rental basis. However, the increased cost of construction equipment could
