PAC 2 Stumbles on Scandals in DNIT

By Rob Sawers, Contributing Reporter

RIO DE JANEIRO, BRAZIL – The corruption scandal that boiled over last week in the Ministry of Transportation and the National Department of Transportation and Infrastructure (DNIT) seems to be affecting more than just the careers of the seventeen bureaucrats who resigned. Large numbers of public works in transportation infrastructure that were part of the PAC 2’s agenda are now being delayed or cancelled.

The specific funds that allegedly disappeared into the hands of former minister Alfredo Nascimento’s son and his political party were not explicitly destined towards the PAC budget, but according to the newly appointed minister, Paulo Sergio Passos, the crisis in DNIT’s budget is having more indirect knock-on effects.

Speaking to major national media O Globo, Passos admitted that DNIT is “reviewing all of [its] projects. This will affect projects that are already underway, but especially those that are still in their planning stages.”

DNIT has also admitted that they expect only 74 percent of PAC 2’s transportation goals to be met by the 2014 deadline. Currently, it has been reported that only one percent of the planned projects are complete, 27 percent are underway, and four percent are still in the bidding stage.

Part of the reason why the slowdown in infrastructural development is linked to the scandal is that the it involved Nascimento’s ministry accepting bribes from private contractors – construction firms that were bidding for contracts on PAC development projects. With these contractor relationships now in question, the completion of some of these public works is looking less likely.

Although the ministry has not specified which projects are being delayed or cancelled in the wake of this crisis, many projects are already showing signs of a slowdown due to lack of funds. In Rocinha, Rio’s largest favela, the PAC 2 developments have practically stopped. Initial plans included multiple roads and walkways to connect the crowded alleyways of the hillside favela, but residents have seen little improvement after the highly publicized sports complex was completed last year.

One of the highly lauded developments of the PAC scheme is the teleférico, or gondôla, system that was recently opened in the Complexo do Alêmão. The government has initiated plans to reproduce the teleférico in the Providência and Rocinha favelas, but critics and favela residents alike have questioned the value.

The scandal that exposed Nascimento’s wrong-doings has opened up what Professor Emerson Silva Masullo of the Catholic University of Brasilia (Universidade Católica de Brasília) has called a “pandora’s box.” In addition to the alleged bribes taken from contractors, and the dramatic growth of Nascimento’s son’s construction company, it is alleged that R$287 million were channeled to a mining company owned by an acting representative in the national legislature, Djalma Diniz.

On top of this, the newly appointed head of DNIT, Marcelino Augusto Rosa, is at the center of a serious controversy over conflict of interest – Rosa’s wife, Sônia Lado Duarte Rosa, is a leading representative of a company that was awarded a DNIT contract for improving highway infrastructure.

With the allegations abound, the ministry will be challenged to pull off the dramatic renovation of Brazil’s transportation infrastructure that is has been assigned to complete. Passos, however, remains optimistic and determined in his public statements, echoing Dilma’s tough stance on the bidding process.