Business

Brazil's battle to upgrade airports for the World Cup

Labourers work at the new terminal at Guarulhos International airport in Sao Paulo, May 2014 Image copyright Reuters

"If we held a cup in five years' time we'd be ready, but not for this one!" says one passenger, Aroma Martorell, as she passes through Guarulhos International Airport in Sao Paulo.

It is a feeling echoed by many people I've spoken to here amid daily headlines criticising Brazil's readiness to host the World Cup.

But on 11 May, operators at the airport defied the critics and no doubt breathed a sigh of relief too, when its new international passenger terminal opened - as planned - with just a month to spare before kick-off.

But it has not been without hiccups.

During the World Cup, the new terminal will handle only a fraction of the international airlines it originally promised.

After the event, 21 airlines will move across to the terminal which has a capacity for 12 million passengers a year.

Mixed success

When Brazil won the right to host the football tournament, airports were already squeezed and growth in the past decade has piled on even more pressure.

In 2013, more than 110 million passengers passed through Brazil's airports. A decade ago it was only around 37 million.

So the decision to bring the tournament to Brazil was a good excuse to address the country's infrastructure needs. But seven years on, there has been mixed success when it comes to airport upgrades.

The capital, Brasilia, opened a new terminal just last month. But only a few days ago news broke that work at Viracopos airport outside Sao Paulo was partially suspended because of safety concerns.

The airport in the north-eastern city of Fortaleza, another World Cup city, will have a large canvas tent to welcome passengers instead of a new terminal.

"The problem has been that the recent government has seen private investment in infrastructure not as a good thing, but as a necessary evil," says Andre Castellini, a partner at Bain & Company in Sao Paulo.

"Concessions have been granted very slowly - much slower than they should have been done."

Image caption Guarulhos airport's new terminal has now opened...
Image copyright Reuters
Image caption ...but will handle only a fraction of the airlines it originally promised during the World Cup

Jigsaw puzzle

And this could have big implications at a time when airports will be under pressure this summer with 600,000 fans expected to come to Brazil for the World Cup.

"Opening an airport is complicated - it normally requires quite a bit of testing of equipment, IT systems and processes," says Carlos Ozores, an aviation specialist at ICF International.

"Normally you need to test it out extensively before it's rolled out. In Brazil you're expecting the system to be rolled out not just on a normal day, but in a prolonged peak travel period."

But airports are just one part of the infrastructure jigsaw puzzle that Brazil urgently needs to solve.

Promises were also made to upgrade roads, ports and railways in the country. Those plans have also been slow to materialise.

"The world cup was just a pretext to do a series of investments in the country," says Prof Eduardo Padilha of INSPER Business School in Sao Paulo.

"We need investments independent of the World Cup, it's an event that lasts just a month.

"There's so much planning that everything is left to the last minute and because of that we always end up paying far more."

Image copyright Getty Images
Image caption Brazil spends just 1.5% of its GDP on infrastructure - half the global average

'Huge traffic jams'

Brazil's workers are also paying for the delays. Roderlei Alexandre Bernadino drives thousands of miles across Brazil each week to deliver soya beans to Brazil's biggest port, Santos.

With a bed in the back of his truck, he spends weeks away from home. Last year was terrible, he says. There were queues outside the port that lasted days.

This year, it is a little better but still, life as a truck driver can be tough.

"There are lots of trucks on the road and they cause huge traffic jams," he tells me.

"Some of the worst things though are the lack of toilets, places to eat and the robberies on the roads, too."

In all about 1.5% of GDP is spent on infrastructure here in Brazil, yet the global average is more than twice that, according to a report published last year by McKinsey Global Institute.

And it is this low investment that is holding back Latin America's biggest economy. With growth slowing, President Dilma Rousseff's infrastructure plans could not come at a more pressing time.

The process of auctioning-off highway concessions has begun - and last year the government passed a ports law but that has been slow to get off the ground.

Image copyright Getty Images
Image caption Low investment in roads, railways and ports is holding back Brazil's economy

Kick-off ahead

In the next decade, the Brazilian port of Santos - the biggest in Latin America - wants to double the amount of goods it ships annually.

But unless more money is spent on investing in new forms of transport, that dream is unlikely to be realised.

"We need to encourage railway investment," says Renato Ferreira Barco, who until last month was in charge of Santos.

"It doesn't even represent 20% of transport - most of it comes by road."

Promises to upgrade infrastructure were made when Brazil was growing strong, but now projects are being delivered in a very different environment.

Kick-off is just around the corner but work has to continue to keep Latin America's economic engine going.

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