Odebrecht Kickbacks: Rio Metrô Line Altered to Render the Work Massively More Costly

RIO DE JANEIRO, BRAZIL – During investigations that led to the arrest of state prosecutor Renan Saad, the Lava Jato Task Force in Rio de Janeiro discovered that the layout of Line Four of the subway had been altered to increase the cost of works.

According to the investigation, one of the additions included an excavation using the “tatuzão” (“the big armadillo”–a tunneling machine equipment used in largeunderground works). The “tatuzão” was dismantled and split into pieces to be shipped from Germany to Rio.

The changes endorsed by Saad increased the cost of the work more than 11-fold. In 1998, the project was budgeted at R$880 million (US$220 million). It rose to R$3 billion (US$780 million), and when it was inaugurated, the project totaled R$9.6 billion (US$2.4 billion).

Prosecutor Renan Saad, arrested on Monday, July 1st, is suspected of having received R$1.265 million (US$316 million) in payments from now-bankrupt former construction giant and highly corrupt Odebrecht to change the route of the Rio subway extension. His defense “strongly” denies the charges.

According to a former Odebrecht executive, in a leniency agreement, Saad provided explanations for changing the route without the need for a new bidding process.

The additions also included a change in the construction methodology so that the tunneling machine could be used.

The project remained idle for several years. With the resumption of construction work in 2009, the adjusted budget stood at approximately R$3 billion. The work was completed in 2016, at the cost of R$9.6 billion.

The task force states that, from Odebrecht alone, the government of Rio de Janeiro received R$59.2 million (US$14.8 million) in bribes for the subway’s extension.

Subway Line 4 connects Rio’s south zone to Barra, in the west zone, and was awarded for the 2016 Olympic Games.

With these latest revelations, Lava Jato reminds Brazilians and the world that this task force is still needed. Leaks by “The Intercept” have recently discredited the achievements of the anti-corruption project.