Brazil Judge Cancels Rio-Maracanã Concession Agreement

By Nelson Belen, Contributing Reporter

RIO DE JANEIRO, BRAZIL – On Wednesday, September 12th, Rio Justice Marcello Alvarenga Leite from the Public Treasury Court canceled the 2013 public-private concession agreement between the state of Rio de Janeiro and Consórtio Maracanã, SA, which had granted the consortium the right to operate the famed stadium for 35 years.

“The bidding process showed illegalities”, said Justice Leite, who pointed out that the bidding process was tainted because Maracanã SA, a private consortium made up of construction company Odebrecht, Eike Batista’s IMX, and AEG, a company specialized in managing sporting arenas, had access to privileged information about the concession agreement.

In addition, the justice noted that, under the agreement, much of the financial responsibility for renovating the stadium for both the 2014 World Cup and the 2016 Olympic Games was unlawfully borne by the state.

This made the agreement “harmful to the public funds of the State of Rio de Janeiro” since under Brazilian public-private partnership law, Maracanã SA, was required to bear the cost of that work.

“[Maracanã SA] reversed the logical order of the public-private partnership contract,” explained Justice Leite. “The rule that the private partner is responsible for the initial expenses from his own resources and later receive the benefit from profits of the business – was not observed.”

As of writing, neither Rio de Janeiro State nor Maracanã SA, have commented on Justice Leite’s decision.

Just this week, Maracanã SA, had announced that Maracanã stadium would close from September 13th to October 9th due to necessary repairs to the pitch.

In June, CR Flamengo signed a new two-year deal to play its home games at Maracanã Stadium until December 31, 2020.