By Doug Gray, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – At least R$91 million of public money has been misdirected in the construction of a new highway in Porto Alegre according to a report from Brazil’s Tribunal de Contas da União (TCU) presented to Congress last week. The building of the BR-448 was one of seven projects for which the government-created body recommended public funds be cut-off while investigations are carried out.

Dilma Rousseff, Rio de Janeiro, Brazil News
Dilma Rousseff made the comments on a visit to Rio Grande do Sul’s shipyard, photo by Roberto Stuckert Filho/Presidencia da Républica.

With the country’s public works programs up against time and investment constraints, President Dilma Rousseff, in Rio Grande do Sul to commemorate the completion of Petrobras’ new P-58 oil platform, was quick to condemn the idea that the government should cut-off any funds.

Branding the idea ‘absurd’, the president argued that the threat of spiraling costs caused by any delay would further slow progress in crucial areas. Even so, the report serves as a timely reminder of the ongoing battle against misappropriation of public money in the country.

The Tribunal de Contas da União is a federal body created in 1997 to keep the government informed of any financial irregularities uncovered in public-funded projects. A list of those flagged up is then presented ahead of the annual budget vote so that Congress can, if desired, put funds on hold.

The vast investment at the core of the two PAC programs begun under President Luiz Inácio Lula da Silva were heralded as major steps forward for the country, but also left the door open for the diversion of some of those funds.

Lula was an outspoken critic of the TCU’s work, and Rousseff’s latest assertion has served to reinforce the widening gulf between the desire for efficiency and transparency in the public sector and the urgent need to overcome Brazil’s severe infrastructure bottlenecks at any cost.

As far back as 2011 the TCU recommended stopping any more public money being spent on the BR-448 so that the use of the funds could be properly investigated. An estimated R$115 million of overpricing of costs were calculated, but that figure has now been reduced to R$91 million, close to ten percent of the original budget.

President Rousseff has followed Lula in her condemnation of the TCU's recommendations, Rio de Janeiro, Brazil News
President Rousseff has followed Lula in her condemnation of the TCU’s recommendations, press image.

Gil Castello Branco, general secretary of the NGO Contas Abertas which tracks federal income and expenditure, considers the president’s reaction excessive, however. “The TCU can only suggest that works are stopped, it is Congress that has the power to halt a project,” he told The Rio Times. “Many times in the past this has been suggested and work has continued.”

Part of the PAC2, the construction of the BR-448 road in Porto Alegre was to relieve the traffic burden on one of the city’s busiest roads. Divided into three portions and no fewer than seven construction companies, the cost to the government of the 22km bypass was set at R$1 billion.

Specific problems found on the report related to the laying of the road surface across all three sections of the highway, where quotes were high enough above market rates and the duplication of invoices was sufficient for the government to enforce a pause in the project.

President Rousseff confirmed in a radio interview that she still plans to attend the road’s inauguration on December 19th, despite the fact that several access points are likely to still be unfinished.

“I think this is politically motivated, and the president is blaming the TCU for the delay so as not to lose votes,” argued Castello Branco. “In the present era, however, the work of the TCU is more important than ever.”

The 2013 report on the TCU’s auditing of public works showed that a total of R$1.2 billion had been ‘saved’ as a result of their efforts, of which 45 percent was in the area of infrastructure projects. As part of their World Cup audit, including airports and stadiums, the TCU claims to have spared the public coffers R$600 million in avoidable expense.


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