Odebrecht gets thumbs up to sell Maracanã stadium concession

Rio de Janeiro state has given the green light to Brazilian engineering group Odebrecht to sell off its concession to operate the Maracanã stadium, a 35-year public-private partnership (PPP) awarded to the group in 2013.

Among the contenders eyeing the operation are consortiums Lagardère/BWA and CSM/GL/Amsterdam Arenas, of which the latter seems to be the frontrunner, local paper O Globo reported.

This is because it already has business ties with Rio soccer clubs Flamengo and Fluminense, which have contracts with the stadium.

Both groups have already qualified with the state by showing their capacity to pay the 40-60mn reais (US$12-18mn) needed to transfer the concession, the report said, explaining that any debt owed to creditors will be discounted.

Odebrecht is currently evaluating stadium management experience, the amount of capital available and the business plans of the two groups. The winner should be announced during 1Q17.

In terms of investment requirements, the new concession holder will have to pay an annual fee of 5.5mn reais and the overall investment is expected to be between 300mn and 600mn reais.

At present, 300mn reais is needed to operate the stadium and the smaller adjacent arena known as Maracanãzinho.

However, local think tank Fundação Getúlio Vargas (FGV) is evaluating the possibility of adding the operation of the Célio de Barros athletics stadium or Julio de Lamare aquatic park to the contract, which could increase total required investments to approximately 600mn reais over the next 32 years.