The Porto Maravilha Real Estate Investment Fund, managed by Caixa Economica Federal and responsible for the private-public partnership (PPP) expenses in the Port, announced that their paperwork is stuck, according to a report divulged in April 2017 by the journal Folha de S. Paulo. In 2011, the Fund bought 6.4 million real estate titles in the Port area in exchange for public lands in the region and for CEPACs, which authorize the construction of buildings taller than the city zoning’s defined limit. The CEPACs nearly doubled the development zone and, with that, doubled the money to be gained per square meter. But the money never arrived.
Caixa justified itself by saying that the real estate market collapsed, and the Bank managed to resell less than 10% of the CEPACs. Because of this, it could not match the pace of repayments agreed to in buying the titles from Rio City Hall, which uses the money to pay the concessionaire Porto Novo – formed by the companies Odebrecht, OAS, and Carioca Engenharia, responsible for operations in the region such as construction, trash collection, and street lighting.
Up until the publication of the report, there had already been expenses of R$5 billion in the area and, until 2026, planning predicts another R$5 billion in investments. To buy the titles, the real estate fund promised to repay the full value in 15 years, and initially R$3.5 billion was used from the FGTS. In 2015, FGTS helped the Caixa fund with another R$1.5 billion to maintain the payment timeline. In May of 2016, however, the fund ran out of money again, undermining the sixth phase of works in the region, budgeted at R$1.2 billion.
According to Folha, on December 28, 2016, three days before the end of Eduardo Paes’ term, Rio City Hall bought R$62.5 million in real estate to help the Caixa fund and, thus, to pay of some of the concessionaire’s debts. “The city also accepts receiving R$725.9 million in real estate as a guarantee against future debts with the concessionaire. However, as with Caixa, the city can not resell them on the market now due to the crisis,” reads the article. The debt with the companies has reached R$40 million.
The payment of bribes for the liberation of Caixa Federal funds for Porto Maravilha is one of the targets of Operation Car Wash in Rio de Janeiro.