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Urban Planners Hail Haddad

VLUU L100, M100  / Samsung L100, M100

Sao Paulo, city of ziggurats

Source: Viomundo.

Urban planning experts hail Haddad for anticorruption effort

The city government of São Paulo, together with the state Public Ministry [prosecutor], has taken a rigorous approach to the investigation of a corruption scheme that has ruled the approval process for building projects in the city in the last eight years.

Petty and traditional corruption, which has always accompanied the obtaining of official permits for the use and occupation of urban land is something with which we are all familiar. Continue reading


GGN | The Saga of Eike Batista


Source: GGN.

It is official: OGX, the oil and gas division of the Eike Batista “X” group — EBX — has filed for bankruptcy.

In the aftermath, and in the background of the “rise and fall” narratives that proliferate  —  as Luis Nassif points out, is a metanarrative, a narration of the narrators as they narrate.

Today’s “Valor” has an article comparing the fall of industrialist Eike Batista with the flattering remarks about him by president Dilma Rousseff.

There are two moments in Eike’s life. At the pinnacle of his success, he was the foremost symbol of Brazlian entrepreneurship. After the fall from grace, he is treated as the bastard child of state capitalism. At the pinnacle, the object of the most perverse sort of cult of personality. After the fall, it is “Take the kid. He’s yours.”

The hypocrisy of the shapers of public image is just that. With success comes flattery and the hope of future partnerships. With failure, a merciless beating.

At the pinnacle, Eike was saluted by  Veja as an exemplary entrepreneur. Época magazine gave him an award. When the ship capsized, the same Época supplied a cover story saying that Eike was   a symbol of the failure of state capitalism, while  Jorge Paulo Lehmann symbolized the success of the market.  Lehmann had better not slip up, or else he will find himself subject to the same hypocrisy.

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Trensalão | Furthering the Plot


IstoÉ magazine overreaches a bit in selecting a Watergate-themed headline for this week’s issue — All the Toucan Bribery Scheme’s Men. Even so, it continues to lead the way in breaking new aspects of the São Paulo cartel case. I translate because mostly because I found myself with time on my hands.

Source: IstoÉ | Viomundo .

Last week, the investigation by the antitrust authority CADE demonstrated that the formation of cartels in the commuter railway sector is a national phenomenon. This enormous swindle, investigators concluded, was repeated in various regions and was systematically manifest in São Paulo, with bid-rigging, price-fixing and subcontracting of auction losers.

The frauds, spanning the 20 years of the PSDB government of São Paulo, exhibit some peculiarities that differentiate them from  other schemes investigated by CADE, however.  The São Paulo scheme stands out for its pioneering nature (the scheme began operating in 1998, in the middle of the Covas administration), its duration, its dimensions and the sums involved — nearly half a billion reais drained away during the reign of the Toucans

More importantly, however, the S. Paulo Metrô scandal has detected the participation of public agents linked to the PSDB. In exchange for guarantees that enabled the swindle to continue and the profits of the cartel to increase.  Significant figures of the PSDB took bribes and greased the wheels of a bribery scheme that diverted public funds into poltical campaigns.

The magazine offers no conclusive details on who received what, if anything. Continue reading

Metrogate | “Marked Cards,” Says Folha


Source: Folha de S.Paulo

An exchange of e-mails among Siemens executives indicate that companies had prior access to the plans of the CPTM for four auctions held by the state government in 2004 — during the second term of Geraldo Alckmin (PSDB) as governor.

A document in the possession of federal antitrust authorities to which the Folha had access show that even before the publication of the conditions for the auction, the companies were already discussing how to divide up the  Boa Viagem program, launched by Alckmin and designed to refurbish, renovate and modernize the trains.

On November 24, and titled “Acquisition Planned by CPTM in Brazil,” an e-mail sent by a Siemens exec detailed how the company wish to divide up the contracts among the major suppliers. The first public announcement of the auctions were not made until two days later.

“The various reforms should go to various suppliers. The main goal of the  CPTM is to assign the complete package to four major suppliers  (Alstom, Siemens, Bombardier and T’Trans). In our case, we can count on  Iesa and  MGE as subcontractors”, the e-mail, signed by executive Marcos Missawa, said.

[Link] The other side: State denies ever discussing project with contractors

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The Dreamliner and the Brazilian F/A-18


Source:  Radar On-line (Veja magazine)

The Planalto Palace has two serious concerns with news of U.S. spying. First and most obviously, the presidential palace wants to know how close the U.S. spy agency got to the offices of the President and her ministers.

Another priority is to learn the extent of industrial espionage. A major risk, according to palace sources, is the potential violation of confidential information shared during the negotiations over the purchase of fighter jets for the Brazilian air force.

Not coincidentally,  Brasil continues to evaluate three models of fighter: French, Swedish and American.

The American entry is the Boeing F/A-18.

In its most recent “yellow pages” interview, Veja features Boeing’s Jim McNerny evaluating the opportunities present in the Brazilian market, an interview conducted at the Boeing offices in D.C.

Boeing and Brazil’s Embraer signed a memorandum of understanding on June 26 to jointly market Embraer’s medium airlifter, the KC-390 — above.

Veja’s softball interview — a specialty of the house — touches only briefly on the fighter order, but does focus, sympathetically,  on the woes suffered by the Boeing 787a story covered on July 15 by Veja’s business-themed sister publication Exame.

The exec says that all the lithium ion battery problems have now been resolved.

A July 15 story in Exame, however, suggests that the headache persists:

Boeing faces a revealing public test of the carbon-fiber technology used in its 787 Dreamliner after a fire broke out on one of its aircraft at Heathrow Airport, in London.

British investigators say that the lithium ion batteries on the Ethiopian Airlines aircraft probably did not cause the fire, alleviating concerns about the return of the problem that led to the cancellation of Dreamliner flights for more than three months earlier this year, when a battery caught fire and another overheated.

Wall Street and passengers so far seem unconcerned: Boeing shares are expected to stabilize on Monday [July 15] after falling 4.7% on Friday. The airlines are keeping their aircraft flying and passengers in Japan, the jet’s primary market, are not cancelling flights.

Japan is said to be refusing to declare the aircraft flightworthy, regarding which McNerney says,

Safety is critically important to the Japanese, as it is to us. In Japan, there is zero tolerance for safety issues. They are asking for evidence that nothing else is wrong. We will provide the evidence. The situation is totally normal. We have sold 59 aircraft to ten airlines, none of them, so far, Brazilian. But an Ethiopian Airlines  787 is beginning to land in Brazil, in São Paulo and Rio. By year end we will have delivered 110 aircraft.

According to a July 2 story in the Telegraph,

JAL and its rival All Nippon Airways (ANA) both blamed the grounding of their Dreamliner fleets for hitting revenues to the tune of $200m, prompting Boeing to print full-page apologies in major Japanese newspapers. Japan is the single-biggest market for Boeing’s newest aircraft.

Veja closes its yellow pages interview by asking in general terms about what it was like to run a company in a country where corruption is rife — a question the executive deftly avoided, saying, “I would not say that Brazil is dramatically worse” than other countries in this area.

The exec also makes a point of promising that the fighter sale would include the technology transfer demanded by the Brazilians.

The interview bears all the earmarks of a charm offensive — as in the subtitle in which McNerney is quoted as saying, “My response [to news of aviation disasters] is the same as anyone’s. Human tragedy is human tragedy.”

The yellow pages are known for their publicity-driven, hagiographical profiles, and this seems like no exception to the rule. Consider the following ridiculous softball exchange:

Q: Is the 787 an enormous innovation?

A: Without a doubt. It is what the 707 was in its day [launched in 1958, it was the first Boeing commercial jet and the first in its class to achieve commercial success.] The 787 offers airlines improved performance and fuel efficiency, less environmental damage and lower costs. It is a productivity tool.

Q: What are the advantages for passengers?

This follow-on  question lacks a “disadvantages” follow-up.

Exame again, however:

The question is, can the aircraft that caught fire be repaired easily at a reasonable cost? These specific repairs have never been conducted on a operation commercial airliner. That makes the Ethiopian Airline incident the first opportunity for airlines, financiers, and competitors to study a real-life example of how to repair the plane and and how much it will cost.

Diagnosis: a mild case of «autohagiography by proxy» — self-praise and self-defense in a quasi-journalistic genre.

Coverage | Rating Port Reports

Porto de Santos - Fotografias antigas

Via Observatório da Imprensa

By: Rolf Kuntz

Translate: C. Brayton

The Brazilian government is busy trying to stimulate the modernization of and competition among the ports, the stated goals of Provisional Measure 595, approved by a final vote in Congress on May 16.

Brazilian ports are among the best in the world at processing iron ore but occupy 35th place in the handling of containers, according to a study executed by FIRJAN and reproduced in the May 19 edition of O Globo.

To stimulate competition, however, it will be necesary to multiply access routes to various terminals, the Estado de S. Paulo warned in an article published the same day.

The contrast between coverage by the Folha and O Globo is striking: the Folha refers insistently to the current “chaos” as O Globo looks forward to an advance in the rankings, as follows.

Brazilian ports are experiencing a paradox. In port terminals for the export of iron, Brazil leads the world rankings in first, second and fifth place. Among ports that handle containers, it falls to 35th place, bringing up the rear in a study released by FIRJAN, the Rio de Janeiro industrial federation. Investments in increased capacity, modernization of equipment and improvements in electronic cargo handling could elevate Brazil to 17th place within three years. This leap, according to experts, could be favored by the MP dos Portos, approved last week in Congress.

Returning to the Estado analysis and its prognosis of “chaos”:

“The lack of alternative routes ends up overloading the southern and southeastern coastal ports, while other ports are practically idle.  In the area of grains, nearly two-thirds of production for export leaves the country through Santos (SP) and Paranaguá (PR). The rest is divided among 16 terminals scattered along the coast,” the article said.

With these articles, the two newspapers enriched the reader’s understanding one of the hottest and complex issues of the week, the vote on the Provisional Measure of the Ports. The major news organizations made a mighty effort over the course of that week to follow the voting in the two houses of Congress. Moreover, they took the trouble to explain the issue in detail and demonstrate to readers how important it was.

Hard Work

There were long, hard negotiations in the lower house. The government had failed to mobilize its congressional base of support. For this reason, a last-minute push was needed to obtain votes for the measure without agreeing to disastrous amendments.  MP 595 was to lose its validity at midnight on May 16.

An MP is a bill sent down by the executive to be voted by the Congress, with a time constraint. The mechanism is often criticized as an incursion of executive power into the powers of Congress.

With some of its main allies working against the bill, the government had to make concessions and promise resources for projects financed by budget amendments.

According to journalistic accounts, the Treasury is to release R$ 1 billion, and more political appointments are to be made. Debates in Câmara went on well into the night and the decisive session lasted 22 hours. Lawmakers were photographed sleeping on the floor of Congress, but sleep is a luxury reporters do not enjoy.

Observing this marathon was only part of the mission. Day by day it was necessary to explain the principal changes proposed, their consequences, and the probable reaction of the government.  It may be argued whether the effort was consistently successful, but the performance of the media was undeniable. It would be very difficult to obtain, in these conditions, a better result.  On May 17, the major dailies were still fixated on final approval of the bill, obtained quickly and with surprising facility by the Senate. The effort to translate the details of the text for the lay reader and to indicate the likely presidential vetos continued on Saturday.

Complex Agenda

On Sundary, the newspapers made space on the front page again for the topic.  “Brazil may advance in global ranking,” informed O Globo, with a jump head for an article on the classification and future of the ports. “New ports will require new roads and railroads,”, was the top headline of the Estadão. In a more discrete reference to the story, at the foot of the front page, the Folha de S. Paulo registered the statement: “‘I am not an evil genius’, said Eduardo Cunha, an opponent of the MP dos Portos”. Cunha leads the PMDB in the lower house of congress, the part of vice-president Michel Temer and the government’s most powerful ally. Its resistance was the principal obstacle to the approval of the measure.

Given the prospect that certain articles may be vetoed, there is much new material that will have to be explored and explained in subsequent editions. To date, the MP dos Portos is the most complete and best-organized governmental initiative to increase efficiency and competitiveness of the Brazilian economy.  But it is merely one part of a much broader agenda, as exemplified by the Estado’s story on the condition of access roads connecting to the terminals.

Odebrecht | Risks and Riches

Maracanã undergoes reconstruction

Maracanã undergoes reconstruction

2013 has so far been a time of trials for the Brazillionaire, a caste that has benefited significantly in recent years from the Lula government’s ambition to breed and incubate Brazilian multinationals with acquisitive power — think of JBS-Friboi’s takeover of the venerable Swift & Co.

The most visible sign of decline has been the performance of companies in the Eike Batista group, whose OGX petroleum subsidiary leads losses recently in the BM&FBovespa and is reportedly seeking outside and foreign investment.

Via Brasil 24/7.

With close ties to PT, Odebrecht carries $R 62 billion in debt

The Odebrecht group, which operates in the petrochemical and biofuels markets, produces nuclear submarines, participates in the management of the Maracanã football stadium and is one of the companies benefiting most from the amended Port Law, has run up debts equivalent to 3.5 times its net assets of R$ 17 billion.

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