December 5, 2016 / 8:12 PM / 2 years ago

UPDATE 1-Brazil builder granted leniency over World Cup stadium cartel

(Adds background on leniency deal over World Cup corruption)

By Ana Mano

SAO PAULO, Dec 5 (Reuters) - Brazilian antitrust watchdog Cade on Monday signed a leniency agreement with Brazil’s second-largest construction firm Andrade Gutierrez Engenharia SA in which the company admitted to being part of a cartel for building World Cup soccer stadiums, the agency said in a statement.

Andrade Gutierrez provided evidence that implicates five other engineering firms that colluded in the bidding for contracts to build or renovate stadiums used in the 2014 FIFA World Cup hosted by Brazil, Cade said.

The leniency deal is the seventh struck by Cade with companies that have been blacklisted for involvement in Brazil’s largest corruption scandal centered on state-run oil company Petrobras.

The new agreement signals tougher regulatory oversight over companies suspected of engaging in anticompetitive practices to win contracts from government or state-run companies.

Cade found evidence of bid rigging on contracts for five stadiums, including the Maracanã in Rio de Janeiro, Arena Pernambuco near Recife and Estádio Mineirão in Belo Horizonte. The names of two of the five stadiums remain confidential so as not to hamper investigations, Cade said.

Last week, Andrade Gutierrez and Cade announced another leniency agreement as part of a separate bid rigging probe related to engineering works carried out in Rio de Janeiro shanty towns.

Andrade Gutierrez was responsible for the most expensive arena built for the World Cup, Brasilia’s 70,000-seat Mané Garrincha National Stadium. It was not yet known whether the stadium was subject to bid rigging but it cost more than $800 million at the time, a price tag that helped fuel violent protests.

With no top-tier soccer team in the capital, Brasilia, the city is struggling to cover the $2.5 million it cost to maintain the stadium, a coliseum-like building that has drawn its biggest crowds for concerts by Paul McCartney and Beyoncé. (Reporting by Ana Mano and Anthony Boadle; Editing by Grant McCool)

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