By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – Rio de Janeiro officials, rushing to get everything ready for the 2016 Olympics in August received bad news yesterday from the federal government. The loan to finish the construction of Metro Line 4, which will take visitors to see the Games in Barr da Tijuca, will not be authorized if the state does not pay its creditors first.
“Credit operations must follow the parameters of the National Treasury. Among them is that the state is compliant. Without it, we will not endorse any new loans,” Treasury Secretary Ana Paula Vescovi told reporters. “We are not introducing any rules. They are already there.”
The state has been negotiating an R$1 billion loan from Brazil’s Development Bank (BNDES), but this type of loan needs to be approved by the country’s Treasury.
On June 17th, Rio de Janeiro’s acting governor, Francisco Dornelles, declared a financial emergency and warned that the state may not be able to comply with all of its obligations during the Olympic and Paralympic events.
Last week, the Brazilian federal government announced R$2.9 billion-worth in financial aid to Rio de Janeiro to help the state put on the 2016 Olympic and Paralympic Games. The resources, however, will be exclusively used to help pay for security during the events.
In addition to the almost R$3 billion in help from the federal government for security during the Games, state officials had also asked for a R$1 billion loan from the Treasury to help pay for the finalization of the metro line. The new Metro Line 4 will connect Ipanema to Barra da Tijuca and is scheduled to open on August 1st, just four days before the Games start.
On Monday, June 27th, daily O Globo published an interview with governor Dornelles, who said he was optimistic but realistic, and that if some measures were not taken the Games would be a ‘failure’.