Although it's only a few months before the official events begin, much uncertainty and problems arise well ahead of the 2016 Olympics scheduled to be held in Rio de Janeiro, Brazil. Funding for the construction of the Olympic Deodoro complex, a venue where 11 of the Olympic events such as rugby sevens and BMX racing, has been suspended on suspicion of fraud
According to Reuters, the funds coming from state lender Caixa Economica Federal (CEF.UL) were suspended after a court order was issued. The news regarding the suspension was first leaked on Tuesday through an online website.
An earlier report said that the total suspended funds amount to 128.5 million reais or $35 million. The same report said that evidence was found indicating fraud regarding earthmoving services at the venue.
Caixa Economica Federal, however, said it could not give details regarding the cause of the suspension, saying that the case is highly confidential. The company merely stated that it was suspended in giving payments to a consortium building the Olympic complex.
The Deodoro consortium is made up of two different builders: Queiroz Galvão and OAS, an unnamed source told Reuters. Both are entangled in the investigation being held for the Petrobras scandal. Both Queiroz Galvão and OAS did not give any comments.
Deodoro is the second-largest Olympic cluster in Rio de Janeiro, currently containing nine venues. It reportedly costs 800 million reais. Prosecutors suspect corruption in Olympic building projects because the construction companies involved have already been charged with graft in the massive Petrobras case.
This news comes in addition to the current political problems that the host country is facing. Parent Herald earlier reported that there is an increasing concern over the political backdrop of Brazil, with many thinking that it won't be good for the upcoming Olympics 2016.
"We don't know if we'll have this government or some other government when the Olympics arrive," Alberto Ramos, co-head of Latin America research at Goldman Sachs, told CNN Money. "The country is getting increasingly socially and politically polarized and that's not good."
