By Jack Whibley, Contributing Reporter
RIO DE JANEIRO, BRAZIL – The Odebrecht Group’s involvement in infrastructure projects across Brazil, the Americas and the Lusophone (Portuguese speaking) world is vast, and it has expanded into mainland Europe and North Africa generating a reported US$40 billion of worldwide revenue in 2012. Seemingly with a hand in most of the World Cup and Olympics construction, the company has seen more and more time in the spotlight.
Founded in Salvador in 1944 by Norberto Odebrecht, the Odebrecht Group now includes subsidiaries catering to engineering and construction, as well as investments in infrastructure and energy. The group’s expertise lies in many sectors including oil and gas, real estate developments, transportation, sports and stadiums, petrochemicals, and ethanol production.
Despite its penetration into markets outside Brazil, over sixty percent of Odebrecht’s revenue is still generated in Brazil itself. This has led some to comment that Odebrecht’s main weakness is the geographical concentration of its operations and its potential over-dependence on the Brazilian market.
However, Odebrecht’s concentration in Brazil means that it has been insulated to some degree from the global economic woes of the last five years as infrastructure development in Brazil continues apace.
Just in May 2013, the Centro-Oeste Consortium, a group of Brazilian companies led by Odebrecht, was reported to have won a R$1.07 billion contract to provide water and sewage services in four municipalities: Aparecida de Goiania, Trindade, Rio Verde and Jatai.
Odebrecht’s pipeline of work could be even healthier by the end of this year, as it is said to be bidding for concessions on both Rio’s Galeão and Belo Horizonte-Confins airports. Those concessions are due to be awarded by the end of October 2013.
The Odebrecht Group secured a number of contracts across Brazil related to the 2014 football (soccer) World Cup. These included the renovation of the Fonte Nova Arena in Salvador, the Pernambuco Arena, the Itaquerão in São Paulo, as well as the Maracanã in Rio. However, none of these projects has been without its problems.
São Paulo’s Itaquerão stadium has been in dispute with the government over funding, and disagreements are said to exist between Odebrecht and the Corinthians club.
In a recent press release from FIFA though, the CEO of Odebrecht Construction, Benedicto B. da Silva is quoted as saying, “We have reached an agreement to guarantee the delivery of the stadium in Brazil’s biggest city on 31 December [2013]. There was no issue about our capacity to deliver the arena in time.”
Last week the firm made more headlines when 36 roof panels came loose in the Fonte Nova Arena after heavy rainfall. The delays to the Maracanã have been well reported since its re-opening was put back from December 2012 to at last opening its doors on June 2, 2013.
Also, the fact that an Odebrecht-led consortium recently won the bid for the 35 year concession to manage the Maracanã has caused controversy. The Brazilian government has spent over R$1 billion (almost fifty percent more than budgeted) on the renovation of the Maracanã.
To recoup some of this money, the government has leased the stadium to the Odebrecht-led consortium, leading to demonstrations and criticism that Odebrecht had an unfair advantage over its competitors, having just completed the renovation works. The mere fact that the stadium is being privatized even led Pelé to speak out, saying that the Maracanã “belongs to the people.”
Odebrecht has also secured projects related to the Rio 2016 Olympics, including the construction of Metro Line 4 between Ipanema and Gavea, works which have caused much disruption in Zona Sul (South Zone).