Rio’s Mayor Wants to Sell Future Revenue From Oil Royalties and Special Holdings

RIO DE JANEIRO, BRAZIL – In his last year in office, Rio’s Mayor Marcelo Crivella authorized the opening of a bid for the municipal government to sell rights to future rights to oil royalties and special holdings to which the municipality has direct access.

The order from the Treasury Secretary Rosemary de Azevedo Carvalho was published on Tuesday, August 18th, in the Municipal Gazette. In a single step, she approved the term of reference and authorized the opening of the bidding process, in the form of a trading session, for the definitive assignment of “part of the flow obtained by the economic rights related to future municipal revenues from the credits of royalties and special holdings”.

The Rio de Janeiro City Hall’s 2019 accounts, published in the Municipal Gazette in April, report a financial scenario that causes apprehension. The balance shows that Mayor Marcelo Crivella’s administration has a negative balance of almost R$4 billion.

City councilors are trying to block the sale of future royalty revenues.

City councilors Átila A. Nunes and Carlos Caiado on Tuesday signed a bill in the City Council that aims to ensure that any anticipation of future royalties may only occur with the approval of the Legislature.

The city councilors have also forwarded a motion to the city’s Audit Court to suspend the bid authorizing the assignment of the city’s future oil and royalty credits and special holdings entitlements.

“In practice, the Mayor is trying to blanket his administration’s shortfall by compromising the next administration’s revenues,” argues Átila A. Nunes.

In the motion, the councilors also ask for a review of future losses that could be incurred in the municipality’s accounts.

“The current Mayor is implementing a measure that will hinder the economic and financial future of the city. It is virtually a criminal offense against Rio de Janeiro. The measure is entirely illegal and violates the Fiscal Responsibility Law,” Caiado says.

The city councilors stress the need for all financial and budgetary data and a complete description of all costs involved in the operation to be presented. If any undue advantage is found, the fine should be applied directly to Mayor Marcelo Crivella.

“As if it weren’t enough to bankrupt the city, Crivella wants to make the next administration unfeasible,” said Attila.