April 02, 2015

RIO DE JANEIRO (AP) Rio de Janeiro's mayor has dismissed reports that layoffs of construction workers at one of the main 2016 Olympic sites could result in potentially damaging delays.

At a hastily called news conference at Deodoro, where 11 Olympic sports will be staged, Eduardo Paes said on Thursday the layoffs by construction company Queiroz Galvao were part of an ill-advised strategy to strong-arm the city council into making quicker payments for the $205 million project.

Dozens of workers at Deodoro, where about 1,000 workers are employed, had been fired and hundreds of others warned they could soon be let go if funds owed by the city were not received soon, the Estado de S. Paulo newspaper reported.

Queiroz Galval refused to confirm the layoffs, but workers leaving the site on Thursday showed The Associated Press their pink slips.

''Lies. What they want is to use the press to pressure City Hall into paying before the deadline,'' Paes said on a precipice overlooking the vast scar of raw earth where Deodoro's Olympic venues are going up. ''This pressure is not going to work.''

Paes added that reports of looming layoffs were part of a worn ''little strategy'' commonly used by Brazilian construction companies to jack up the price of work already underway.

He reiterated his pledge that Olympic venues would be on time and on budget. Unlike for last year's World Cup, when many of the 12 stadiums built or remodeled were hit so hard by cost overruns that final prices were two or more times the original estimate.

Paes acknowledged that some workers may actually have been laid off but suggested they were likely on temporary contracts, or the firm just wanted to get rid of them.

Joedson de Lima Santos, a 33-year-old carpenter and father of one, said he was among those fired this week.

''The mayor, the government, it's all their fault, and it's we, the workers, who are paying for their errors,'' said Santos, who showed journalists his pink slip as he left the construction site. ''If they'd paid their bill none of this would have happened.''

Paes acknowledged the multi-layered process for making government payments, which is aimed at preventing fraud and graft, can sometimes means long waits, but denied reports that payments due to Queiroz Galvao were four months late. He said $35 million has already been paid.

Queiroz Galvao is one of more than a dozen Brazilian construction firms implicated in a massive corruption scheme at state-run oil giant Petrobras. The firms are accused of bribing former Petrobras officials and politicians in exchange for overvalued contracts. Money was allegedly funneled back to the campaign coffers of the ruling Workers' Party and its allies.

The scandal, as well as falling commodities prices, has contributed to Brazil's stalled economy, with many city governments around the country forced to make budget cuts, hitting basic public services.

Paes pointed to the scandal at Petrobras as evidence that the sluggish system of controls on public funds is sorely needed in Brazil.

Work at Deodoro got off to a late start. Olympic officials expressed alarm about the construction delays, but during a recent visit said they were satisfied with the pace of progress.

Thursday was the first time the news media has had access to the site, a vast grassy area sliced by muddy dirt roads plied by bulldozers and other heavy equipment. In a vast oval of flattened red earth, workers labored away on the future canoe slalom rapids. A test event is slated for November.

In a brief statement emailed after the mayor's news conference, Queiroz Galvao and the other firm involved in building Deodoro said the site was ''rigorously within the timeframe,'' adding they guaranteed it would be delivered on time as long as the city made its payments.


AP Sports Writer Tales Azzoni in Sao Paulo contributed to this report.


Follow Jenny Barchfield on Twitter: www.twitter.com/jennybarchfield

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