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2012
HIGH PERFORMANCE
MANAGEMENT
RIO DE JANEIRO
CITY GOVERNMENT
SUMMARY PART 1
HIGH PERFORMANCE MANAGEMENT
RIOS BRAND
PREFACE
A CHANGING RIO, 09
PART 1
HISTORICAL BACKDROP
RIOS SCENERY DURING THE FIRST DECADE OF THE 21st CENTURY
Internal Context
External Context
CHAPTER 2
CHAPTER 3
CHAPTER 5
SUMMARY PART 2
HIGH PERFORMANCE MANAGEMENT
STEP BY STEP
PART 2
INTRODUCTION, 113
THE HIGH PERFORMANCE MANAGEMENT MODEL, 114
Definition of Vision and Strategic Plan
1st Phase Definition of Vision and Goals
2nd Phase Strategic Plan Design
APPENDIX
PREFACE
A CHANGING RIO
One of the major challenges for any government is to ensure the greatest
possible efficiency in its management. This means delivering services to
the population within a defined deadline, at the expected cost and with
quality. But it also means giving priority to projects that will bring useful
and enduring results, maintaining financial health and following a plan with
clearly defined goals for the short and long term.
Although this set of rules is not new to large corporations and important
institutions, it is not largely typical in Brazilian public management,
greatly based on the intuition of its officials or on political influence. The
administration of the city of Rio de Janeiro which took office in 2009
chose a different path: to follow the best management practices, absorbing
successful experiences from both the private and public segments.
The effort was translated into strategic measures such as improving the
City Governments communication channels with the population, leading
to a better understanding of the citys demands and enabling the efficient
selection of priorities. It also brought the payment of performance bonus to
city officials, as in many large corporations, raising employee satisfaction
and productivity levels. But the most important change was the development
of a Strategic Plan with clearly defined goals for the short and long terms,
supported by a structure to ensure their practical feasibility.
Today, Rios Government knows exactly where the city will be in 20 years,
and each action or project that is put to practice is given priority according
to its impacts on the fulfillment of future goals. Seeking results became the
City Halls guiding principle, and it is reflected in each and every one of its
officials as they constantly pursuit focus, discipline, and pragmatism.
The new culture has changed the reality of the citys management. In four
years, we have become far more efficient and better prepared for the future.
And the results achieved in the city were relevant. The City Government has
been able to carry out projects that had been waiting for over a decade to
be executed by finding alternative paths to obtain funds and improving the
quality of service offered to its population.
This is an experience that deserves to be shared, especially in a country
where public administration has so many challenges to overcome. Thus
the motivation for this book, which describes how the change came about,
presenting the main innovations and detailing each step taken by the City
Government in the process. It may be used as a reference for other City
Governments to adjust some of the examples herein to their local realities.
We know there is no such thing as a unique solution, but the failures and
successes of the Rio experience will certainly be a great contribution for the
progress of public management in Brazil.
Eduardo Paes, Mayor of Rio de Janeiro
9
PART 1
HIGH PERFORMANCE MANAGEMENT
RIOS BRAND
CHAPTER 1
THE RIO DE JANEIRO CONTEXT
HISTORICAL BACKDROP
External Context
Global Economic Crisis
2016 Olympic and Paralympic Games
Security Policy
New Prospects for the Oil Industry
17
This trauma marked the bitterest moment for the former imperial capital
city. Since then, Rio experienced sporadic bouts of recovery. The 1988
Constitution assured larger transfers to states and cities and enabled the
City Government to reorganize its finances. In the beginning of the 1990s,
the population witnessed a gradual economic and urbanistic recovery which
brought back some of the citys long lost self-esteem. Paving and drainage
work was carried out, besides a relevant renovation of the landscaping along
Rios coastline.
Such promising moments, despite bringing some comfort to the population,
were never longlasting. Important improvements were generally followed
by longer periods of abandonment. Every breath of financial balance was
followed by further deprivation. Without alternative funding sources and
with a history of political isolation that limited state and federal transfers,
the City Hall lived the last decades on a tight budget and overlooking
important areas such as the citys conservation.
This chain of events undermined the self esteem of Rio residents. In 2006,
a poll carried out jointly by the Institute of Labor and Social Studies and
Macroplan demonstrated that 63% of the population believed Rio would
be much worse in 20 years. Another survey held in 2008 by the Rio Como
Vamos NGO showed that 36% of the citys residents claimed they were not
proud of living in Rio de Janeiro and that 61% judged that their quality of
life had worsened compared to the previous year.
Such a scenario imposed a series of challenges for the administration that
began in 2009. Although the situation was better than in the 1980s, with
the whole country entering a promising phase, deeply rooted issues would
have to be faced such as the populations lack of trust in public authorities,
the concerning rates in several areas of human development, lack of
dialogue with the state and Federal Governments, and budget constraints.
Adding to these most urgent challenges, the City Hall would have to develop
a government project that could envision a future for the city in the decades
to come. A plan with long term goals, including the necessary conditions to
become more than simply a letter of good intentions.
20
Internal Context
Opportunities for Improvement in Key Areas for Social Development
In the first decade of 2000, Rio felt the need to bring about rapid progress
in important areas of social development such as health, education, housing
and transport. The challenge covered the whole city, but was even worse
in regions with lower human development index like the West Zone, which
was experiencing the fastest population growth. Solutions demanded heavy
investments in different fields and required reformulation of some of the
citys public policies.
Health
Rio ranked as the worst primary care coverage among Brazils capital cities.
This means that the city was literally set apart from the countrys public
health policy. Primary care, which priorizes prevention and generates savings
in disease treatment, bringing better quality of life for the population, was
the globally accepted strategy adopted by the Federal Government in the
1990s. In Rio, this coverage grew beyond 10% only in 2010.
2002
1,35%
2003
1,34%
2004
2005
2006
3,29%
5,51%
6,68%
2007
7,36%
2008
7,20%
2009
2010
2011
2012
9,24%
14,90%
27,62%
33,57%
21
So Paulo
2002
16,66%
2003
19,53%
2004
20,0%
2005
2006
22,33%
24,97%
2007
26,49%
2008
26,62%
2009
29,26%
2010
29,38%
30,35%
2011
2012
34,03%
Curitiba
2002
2003
2004
2005
2006
2007
2008
20,77%
22,50%
25,61%
28,85%
31,25%
32,60%
2009
31,89%
2010
32,08%
2011
2012
SOURCE: Ministry of Health
22
24,27%
34,07%
33,48%
Education
Since 2000, Rio de Janeiros public schools maintained a program for
automatic grade passing which approved students without a proper
evaluation. The model, advocated by many educators, did not prove to
be efficient in the city, its immediate consequence being to encourage
poor performance among students. The higher approval rates measured in
the system conveyed the false perception that education had fulfilled its
goals, when actually the rate of functional illiteracy remained alarmingly
high in schools.
2000
2002
87%
2006
90%
2008
93%
2009
84%
86%
2010
90%
2011
* End of automatic grade passing
SOURCE: Municipal Education Department
13,6%
6,5%
23
2000
2001
4,05%
2002
4,29%
2,97%
2003
2004
2,87%
2005
3,16%
2,95%
2006
3,17%
2007
2,61%
2008
3,19%
2009
2010
2,36%
2011
2,31%
Transport
Improved credit and a better economic situation led to a proliferation
of private cars. The inefficiency and low quality of public transport
disencouraged people to use the services. The result was a migration from
collective transport to private vehicles and a consequent worsening of the
citys traffic.
1995
2000
2006
2010
SOURCE: IBGE
24
1.211
1.061
1.159
935
1.421
2000
1.612
2006
1.848
2010
SOURCE: IBGE
Housing
Rio suffered from a deficit of approximately 300 thousand units. The sprawl
of slums, as expected in any large metropolis, was further aggravated by
the lack of inspection of the public authorities and by the absence of an
efficient housing development program.
69,6 thousand
306,6 thousand
SOURCE: IBGE
25
Tolerating Disorder
Former administrations in Rio developed important, although punctual,
programs to curb urban disorder in the city. Examples are the Rio Orla
program, implemented in the 1990s, which reduced irregular parking and
illegal commerce in the beaches, and the Urban Control Center, created
in 1993, which helped organize street vendors. However, the city lacked a
continued policy establishing and enforcing clear rules.
Consequently, Rio residents gradually became accustomed to live in a
state of disorder. In the beginning of the 2000s, this could be seen in the
customary occupation of sidewalks by vehicles, in the excessive number of
street vendors without any kind of control, in the excessive amount of ads
installed without any regulation. In regions with greater density and rising
real estate value such as the West Zone, buildings rose illegally, occupying
public land, environmental protection areas, and disaster-prone areas.
Rio de Janeiros population was not happy, notwithstanding their being
seemingly accustomed to the citys chaotic situation. According to a survey
held in 2008 by the Rio Como Vamos NGO, 53% of Rio residents considered
bad or very bad the occupation of sidewalks by automobiles and 44% felt
the same about the invasion of public spaces by illegal trading.
Undermined Finances
After recovering from the bankruptcy in 1988, the City Government saw
an opportunity to balance its accounts, aided by mechanisms created by
the Federal Government. The 1988 Constitution established a new form of
sharing federal resources with states and municipalities, and the FUNDEF
a fund to develop basic education and teacher training enabled a greater
share of transfers from the states to cities to be invested in education.
Besides these instruments, the City Government also tapped additional
funds during specific moments, such as in 1990, when it issued securities
in the global market. Nevertheless, the situation was never fully controlled
or enduring.
If on the one hand successive administrations correctly chose not to place
the burden on the population, avoiding tax raises, on the other hand they
28
CITY BUDGET
R$ Billion
2002
6,4
2003
7,2
2004
7,4
2005
2006
2007
7,8
8,3
9,6
2008
2009
2010
2011
2012
11,1
10,7
14,2
18,7
21,8
29
Political Isolation
In the last 30 years, the lack of political articulation with the Federal and
State Governments isolated Rio. Although the causes were partisan and
ideological differences among the administrations in the three spheres, as a
result the city was financially smothered, and the federal and state transfers
were much lower than expected for the countrys second largest city.
The problem became obvious in 2007 with the organization of the PanAmerican Games, an international event almost entirely funded by the City
Government with very little aid from the Federal Government, leading the
citys finances to a serious imbalance. Rio de Janeiro got the worst part of
this divergence.
TRANSFERS FROM THE FEDERAL AND STATE GOVERNMENTS
TO THE CITY *
R$ Million
2005
147
2006
118
2007
115
2008
225
2009
217
2010
1.200
2011
1.200
2012
1.300
For citizens, this impression was materialized when they had a specific
problem to deal with. The government offered over 70 contact numbers,
but very little information on which one should be used for each case. Not
knowing where to go, citizens were never able to communicate efficiently
with the administration.
External Context
Global Economic Crisis
The credit crunch in the U.S.A. in 2008 spread uncertainty in all global
economies. In Brazil, the most visible impact was the decline in credit,
with banks cautiously holding back on loans and charging higher interest
rates. There was great fear as to how contagious the crisis would be for
Brazils economy. In the cities, this meant uncertainty about revenues in
2009 and subsequent years. Prospects were tight budgets and the need to
cut down on costs.
Security Policy
Also in 2008, Rios State Government started a program to implement
Pacifying Police Units, meaning community police, in areas ruled by drug
lords and militia groups. The project was successful in regaining state
control in over 20 communities that had been run by these parallel armed
forces. As a result, these areas were reintegrated in Rio de Janeiros urban
mesh, bringing an important decline in the citys crime rates.
CHAPTER 2
THE CHANGE
BEGINS IMMEDIATELY
FINANCIAL HOUSEKEEPING
35
THE CHANGE
BEGINS IMMEDIATELY
THE FIRST 100 DAYS
The beginning of any government elected in a democracy is always a decisive
moment. Firstly because society expects it to immediately put to practice
its campaign promises in its first actions. Secondly, because the first
steps are crucial for the succession of achievements that will follow. The
traditional 100-day or six-month evaluations have the duplicate function
of demonstrating accountability to society and internally calibrating the
directions taken by the new administration.
When the government took office in 2009 amidst the challenging scenario
described in the previous chapter, there were immediate and vital measures
to undertake. As other administrations before them, the new government cut
off functions considered nonessential, audited accounts, and blocked part
of the budget. Fulfilling what was promised during the campaign, it also
attempted to implement most announced measures as soon as possible.
In the first 100 days of its administration, the City Hall submitted to
the population a report containing all campaign commitments and their
implementation status.
37
The most powerful differencial of the new city administration was not,
however, in these punctual measures, but in the management philosphy it
adopted immediately. The focus of the new approach was High Performance
Management. In other words, this meant that every administrative measure
undertaken should take into consideration its efficiency and its long term
impact. This was the trademark of the present administration since the
beginning, and the backdrop for all its initiatives.
The City Governments High Performance Management focuses on three
basic values: results, pragmatism, and discipline. All three must be
identifiable in every decision made. That is, instead of relying only on need
or intuition, the City Hall follows methods to carry out its actions.
This trademark has been constantly present in actions such as the selection
of the secretaries to head the departments, the recovery of the citys financial
health, and the decision to develop a long term plan. The following topics
bring examples of this mode of action. All 100-day measures were crucial to
trigger their results, among them the implementation of the Strategic Plan
at the end of the first year in government.
FINANCIAL HOUSEKEEPING
The new administrations first action was to announce a package of no less
than 40 decrees to reorganize the City Halls structure, which would bring
a relevant reduction in overhead while at the same time open space to
seek new and alternative revenues. The goal was to save R$1.5 billion per
year, or 15% of the citys budget - the necessary amount to bring a first
balance to its finances. Audits were held in all the City Halls contracts
involving construction work, material supplies and services. Since then,
budget management has been controlled directly by the Mayor himself, who
defined routine of weekly meetings to direct resources for each department.
One of the decisions among the 40 decrees was the elaboration by the
Finance Department of a plan to implement an electronic invoicing system
in the city - the Nota Carioca - aimed at modernizing the service tax
collection, reducing bureaucracy and raising the governments revenues.
The result of the project in its first year was an additional R$140 million in
the citys budget.
39
CHAPTER 3
RIOS BRAND IN HIGH
PERFORMANCE MANAGEMENT
45
47
Defines long term aspirations for the city, organized on four pillars: social,
economic, environmental and political. In 2009, the Vision was defined for
the 2020 horizon.
b STRATEGIC PLAN
Guides the City Governments short and mid term actions in alignment with
specific aspirations and defines strategic guidelines, goals and initiatives
to be implemented in priority result areas. The basis for the Strategic Plan
is the citys Master Plan. In 2009, a period of four years, until 2012, was
defined for achieving the goals and initiatives.
Are the teams needed for the correct implementation and monitoring of the
Strategic Plan. Among them is the Project Management Office, responsible
for following up on the strategic initiatives, and the Results Monitoring
Under-Secretariat, responsible for tracking the goals in the Strategic Plan
and in the Action Plan and Results Agreement. Both teams were structured
within the Executive Office of the City Government.
Detailed working plans for each one of the strategic initiatives, for each
department involved, covering goals, metrics, and schedules and culminating
with a results agreement, which establishes a performance management
model based on meritocracy and on the monitoring of important indicators
to evaluate and reward public officials based on the results they achieve.
e MONITORING ROUTINES
Interactions that take place with the purpose of debating the plans progress,
solving eventual bottlenecks and creating engagement for the delivery of
results. The regular meetings aim at facilitating interaction among the
48
c
Delivery
Support Teams
f
High
Performance
Culture
Long-Term
Vision
d
Action Plan
and Results
Agreement
Strategic
Plan
Monitoring
Routines
49
51
CHAPTER 4
HIGH PERFORMANCE MANAGEMENT
IN PRACTICE: RESULTS
FOSTERING INTEGRATION
1746 Call Center
COR - Rio de Janeiro Operations Center
Creation of the Public Services and Conservation Department
UPP Social
ACTING BOLDLY
Urban Mobility
Breaking Paradigms in Education Management
Social Organizations
Rio in Order
Family Card Program
Waste Management
Preparing Leaders
55
HIGH PERFORMANCE
MANAGEMENT IN PRACTICE:
RESULTS
Rios election to host the 2016 Summer Olympics came during the first
year of the administration. This victory represented a great opportunity, but
also greater responsibility. To accomplish its intention of taking the city to a
new level, the government had to face the double challenge of achieving the
goals in the Strategic Plan and fulfilling the commitments set forth for the
Olympic legacy, including a package of over 20 projects agreed upon with
the International Olympic Committee.
To meet this expectation, three fronts were organized to support the first
wave of High Performance Management: (I) Interrupting the cycle of
divestments by rationalizing fiscal management and adopting alternative
forms of tapping resources and attracting investments; (II) Increasing
integration among the public entities and drawing the City Hall closer to
citizens; (III) Breaking paradigms in public management by adopting bold
measures with a long term focus.
The main result of the High Performance Management was the achievement
of over 80% of the goals proposed in the strategic plan by 2011. After
having traced its flight plan, the city administration was brave enough to
make decisions and choices, some of them very hard, to keep the promises
it made to the population. This capacity to meet goals derives not only
from a well drawn strategic plan, but also from the efficient operational
monitoring and tracking structure. The perfect match between a sound flight
plan and a constant supervision of the engine enabled the achievement of
the targets set for the period.
57
58
Raising Revenues
The initial proposal of implementing an electronic invoicing system for
services in the city originated the Nota Carioca project in 2011. With the
new system, all invoices collecting the service tax (ISS) are issued and
stored online. The system was adopted by hotels, schools, movie theaters,
parking garages, fitness clubs, construction companies and other businesses.
Besides reducing costs with paper and physical storage of the invoices,
which according to the old model had to be archived for a period of five
years, the project enhanced the City Governments supervision and control
of tax collections.
Rio residents were encouraged to help the government in supervising the
collection of the tax by getting discounts on their property tax (IPTU). In
the new system, consumers who inform their taxpayer number (CPF) upon
issuance of the invoice are entitled to a credit of 10% of the tax amount,
which is deducted from their IPTU. Besides this discount, prizes of up
to R$20 thousand are drawn among citizens who demand the invoice for
their purchases.
The purpose of the project was to increase service tax collections by 5%
without needing to raise the tax rate. In the first semester of 2011, the
amount collected was already 16% higher than in the same period of 2010.
After one year, the project added an extra R$140 million to the citys budget.
With the Nota Carioca, the City Government was also able to track in
real time all service transactions classified by segment, further aiding
the management of tax revenues. In the beginning of 2012, 103,371
businesses were registered to issue the electronic invoice and over 160
million invoices had been issued, proving the programs adoption by Rios
population and businesses.
59
269
193
456
2009
2010
1.350
896
After 2009, considered a year for adjustments, the City Hall gradually
managed to increase the share of its budget for construction works. In 2011,
this share reached 17.9%, equivalent to R$3.347 billion, far above the
states of So Paulo and Minas Gerais and the Federal Government itself. A
recent account demonstrates that in the first semester of 2012, this amount
rose to R$4.269 billion, corresponding to 19.5% of the total budget.
557
2006
683
2007
873
2008
843
2009
2010
401
1.560
2011
2012
3.347
4.269
Recovery of AP-5
The project to build a sewage and drainage network in Planning Area 5
(AP-5) is the largest public concession of its kind in the country. A private
consortium formed by two companies, Foz do Brasil and Saneamento
Ambiental guas do Brasil, will invest R$1.6 billion to build 19 wastewater
treatment plants and 221 booster pump stations in a period of 25 years. The
City Government will not make any disbursement for this work, receiving,
instead, a share of its dividends.
AP-5 is located in Rios Western Zone and covers almost one half of the
municipal territory. It is home to 30% of Rios residents and includes
neighborhoods like Bangu, Campo Grande and Santa Cruz, which in recent
years housed the fastest-growing population in the city. If it were a city on
its own, AP-5 would be Brazils eighth city in population density, before
capital cities the size of Manaus, Recife and Porto Alegre. Being one of
the regions with the poorest sanitation infrastructure in Rio, currently
only 50% of its sewage is collected, with a mere 4% properly treated.
Untreated wastewater easily flow into the drainage works and run straight
into Sepetiba and Guanabara bays. Several communities in the area are
forced to live side by side with open-air sewage trenches and the stench
and diseases they bring.
An innovative operation was devised to attract private investments for
the project, which offers no apparent financial return. The city and State
Governments will share responsibility for implementing the water and
62
wastewater works in the region together with the private consortium, thus
balancing their return on investment. Currently, the State Government is
entirely responsible for the water supply, through the state water and sewage
utility company Cedae. Since 2007 the city has assumed responsibility for
sewage collection.
The new sanitation bill passed in the City Council and in the State House of
Representatives. Under the new law, Cedae will continue to supply water, but
the sewage system will be built and maintained by the private consortium,
under the City Halls supervision. The gains in efficiency brought by the
private operator, registering users and collecting payment for the service,
will generate approximately R$3 billion in extra revenues. This will make
the project attractive for all parties and enable an investment that would
otherwise be a burden for the public treasury.
The goal is to have 65% of sewage collected and 40% treated in 4 years.
At the end of the concession period, the expectation is to achieve 90% of
wastewater treatment. The project will benefit two million citizens in the
regions 21 neighborhoods.
63
Porto Maravilha
Since the 1970s, successive administrations had continuously failed at
attempting to revitalize Rios port region. Located in the citys downtown
area, it used to be a main gateway for visitors, but suffered a long period
of decadence and degradation. The Porto Maravilha project, which will
finally make the dream come true, is the countrys largest public-private
partnership and follows an unprecedented financial model.
The project includes the revitalization and conversion of an area covering
5 million square meters with a series of urban infrastructure interventions
including drainage and sewage networks, water supply, electricity,
gas, street lighting, and a modern telecommunications grid. The City
Government expects to attract new businesses to the area and increase
the number of residents from the current 30 thousand to 100 thousand in
the next ten years.
The first phase of the project was funded by the city, a total investment
of over R$150 million, to revitalize three of the regions neighborhoods,
covering 350 thousand square meters. The second phase, which will extend
to the entire region and include emblematic transformations such as the
removal of the Perimetral overpass and its replacement for two expressways,
will be executed by the Porto Novo consortium, formed by construction
companies Norberto Odebrecht, OAS, and Carioca Engenharia. The private
consortium will be responsible for implementing and providing urban
services in the region, like waste collection and street lighting, for 15 years.
Total costs add up to R$7.6 billion.
The innovation in this case was how the government covered the projects
costs without spending any of its own resources. The money will come from
the regions real estate prices themselves, which are expected to soar as a
natural consequence of the improvements. In 2009, the city passed a law
64
to extinguish the previous limit set on the height of new buildings in the
area in order to allow the construction of high rise towers. The companies
interested in building under the new code will have to purchase from the
City Government a bond called Cepac - Certificado Potencial Adicional de
Construo (Potential Additional Construction Certificate).
The Cepac bonds were the currency used by the city administration to enable
investments in the region. First they were sold as real estate securities to the
federal savings bank, Caixa Econmica Federal, transfering the operations
risk to the bank and providing the necessary collateral to start execution.
With that, Caixa became responsible for reselling the Cepacs at market
value to organizations interested in investing in the region, in auctions that
have been taking place since 2011. The money obtained from the sales will
be used to pay for the construction of the infrastructure and the remaining
amount - resulting from the likely valuation of the bonds - will be returned
to the bank as profit.
The Porto Maravilha project was inspired by other cities, assimilating and
adapting the successful experiences - and avoiding their flaws - of cities like
Baltimore, Barcelona, Buenos Aires, Hong Kong, Capetown and Rotterdam.
The neighborhoods included in the plan are the Downtown district, Santo
Cristo, Gamboa, Sade, Caju, Cidade Nova and So Cristvo.
The plan includes the building of the Museu do Amanh and the Museu
de Artes do Rio, conversion of the Mau Pier into a leisure area, and the
building of 530 housing units through the New Alternatives program,
besides 700 kilometers of water and wastewater networks, recovery of 650
thousand square meters of sidewalks, 17 kilometers of bicycle lanes and
planting of 15 thousand trees. The removal of the Perimetral overpass will
revitalize regions urban environment. Even with the elimination of the
overpass, the region will accommodate a 50% increase in traffic in the two
new expressways and tunnels.
65
Olympic Park
The Olympic Park is the second largest Public-Private Partnership established
in Brazil and the first in the world to be built under this funding model. It
is part of the legacy of the 2016 Summer Games in the city. Built on the
area of the former Jacarepagu Autodrome, a total of 1.18 million square
meters, the park was designed to hold 15 Olympic and Paralympic sports
competitions, besides a leisure area for athletes. After the Games, it will
become an area for leisure as well as commercial and residential projects.
The urbanistic project was commissioned by the City Hall through an
international competition held with the aid of the Brazilian Institute of
Architects and attracted 60 firms from 18 countries, which designed the
projects considering the use of the area during and after the games. The
winner was a London firm, Aecom Architecture, which also developed
Londons Olympic Park for the 2012 Games.
For the construction of the project in Brazil, the city launched a bid that was
won by a consortium formed by builders Odebrecht, Carvalho Hosken and
Andrade Gutierrez. Total investment will amount to R$ 1.4 billion, divided
into R$ 850 million executed by the consortium and R$ 525 million to be
executed directly by the City Government. After the games, the consortium
will have the right to develop and build commercial or residential projects
in the area.
The Olympic Park will include venues for physical activities, bicycle lanes,
playground, promenades, decks, a marina and a terrace by the shore of the
Jacarepagu lagoon, besides parking areas, meeting and exhibit facilities,
and permanent toilets.
66
Rio Negcios
Created to attract new investments in the city, the Rio Negcios agency
is a result of a Public-Private Partnership between the City Hall and Rios
Trade Association. Its purpose is to disseminate the citys economic and
commercial potential and to act as a bridge between the government and
the private segment.
The model was inspired in similar agencies around the world, like British
Think London and Colombian Invest Bogot, offering support to
entrepreneurs interested in investing in the cities. Based on projects
submitted by private initiatives, the agency helps potential investors to
undertand the citys incentive laws and facilitates their contact with political
leaders and the media.
In 2010, the first year of its operation, Rio Negcios attracted R$745
million in investments to be be alocated until the end of 2014. The
performance was 24.2% higher than the goal, set at R$600 million. 183
organizations went to the agency in its first year, which helped produce 125
potential projects and negotiated operations with seven foreign companies:
General Electric (GE), Diageo, State Grid, Lekunbide, IBM, Columbia
University and Haobo.
Several priority segments were considered as the citys natural vocations
in the efforts to attract investments. Among them are Energy (especially oil
and gas), Hotels and Tourism, Creative Industry (audiovisual productions
and events), New Economies (including information technologies and
scientific innovation), Real Estate and Civil Construction, Call Center and
Shared Services (rendering of services between companies).
The agency prepared a portfolio of opportunities for all these segments,
indicating their demand for logistics, infrastructure, research, and suppliers.
It has also surveyed commercial opportunities for the 2014 Soccer Cup,
including information as varied as event security all the way to supplying
of seats for the Maracan stadium. The material is distributed among
companies, banks, and law firms. Additionally, the agency created a web
portal to provide information for foreign entrepreneurs (www.api-rio.com)
which offers to answer potential investors requests in up to 24 hours.
The agency also intends to go on international missions to intensify relations
with entrepreneurs from Asia, where most prospects for investments come
from, besides Europe and the U.S.
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FOSTERING INTEGRATION
The promotion of greater internal and external integration was established
as one of the citys guidelines since 2009. Internally, improved dialogue
among the several experts and departments in the city administration
raised its capillarity, expanding the governments reach. Externally, bringing
the population closer to the administration was a manner of effectively
understanding the citys demands in order to attack main problems.
This happened through generally rich and productive experiences. The
City Hall regrouped several of its areas that were working for similar
objectives, creating agencies such as the Public Services and Conservation
Department, responsible for everything concerning urban maintenance. It
increased communication between departments and agencies through the
Rio Operations Center, and with the population, with the new 1746 Hot
Line. It also helped to integrate the city with projects like the UPP Social,
which drew closer areas that had been excluded from the city.
All this approximation brought a very important strategic result. Different
areas are now able to share information, thereby increasing management
efficiency. In the past, the City Hall produced a large amount of information
that was not jointly assessed and therefore did not translate into knowledge
or effective actions. The exchange of data enabled a more comprehensive
view of the scenario and the embedding of intelligence in the figures,
becoming a more effective guide for the administrations steps.
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The model attends to a request from the population which always complained
about the difficulty to contact the government, as was identified in interviews
held during the elaboration of the Strategic Plan. With the new system,
residents have a single point of contact with the City Hall to find solutions
for problems ranging from vehicles parking on sidewalks to holes on the
pavement, accumulated garbage, lack of street lighting, or the presence of
wild animals. Each demand has a specified deadline to be answered and
resolved which varies from 4 hours to 10 days, depending on the problem.
To ensure high performance for the service, the government entities involved
established a Plan of Action and Results Agreement. When targets are
accomplished, employees receive a bonus.
Besides the telephone, the service is also available on a web page,
www.1746.rio.gov.br, or in free apps for portable devices in a variety of
platforms. In this case, citizens simply upload a photo of the problem and
send it to the service for the necessary solution. With this tool, users arent
even required to inform the address - they simply click the Locate icon
and the system automatically georeferences the address automatically.
In one year, the service has received 2.5 million calls. Problems were
efficiently solved in 85% of cases. A poll held by Ibope after the first year
demonstrated that 81% of users were happy with the service. Most calls came
from the neighborhoods of Campo Grande, Tijuca, Copacabana, Taquara and
Barra da Tijuca. Main requests and complaints were: trimming of trees and
removal of debris, vehicles parked improperly and concentrations of dengue
mosquitoes, besides complaints about lack of street lighting and holes on
the pavement.
The service also became a very important management tool, one of its main
benefits. With more information about the citys actual demands, the City
Hall can improve management of its public policies and attack problems
directly at their source.
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The solution came in 2010, with the creation of the Public Services and
Conservation Department (SECONSERVA). The agency received a budget of
R$250 million, five times more than what was being invested in the area.
The greatest innovation in this initiative, however, was the concentration of
all entities responsible for the citys daily operation in a single department,
in alignment with the City Halls integration philosophy.
The traditional structure of the City Government created a distance between
the different entities, lacking a single coordination point. Comlurb, for
example, the city cleaning utility, functioned under the Mayors Office.
All other maintenance departments, including the General Conservation
Coordination, were within the Public Works Department. In this case, since
the main mission of this department did not include conservation, this
essencial service was gradually set aside.
The centralization increased the importance of the activity, leading to gains
in focus and synergy. Formerly, basic actions such as maintenance of rain
water drainage systems, for example, were carried out slowly and took up
an excessive waste of efforts, rendering inefficient services. In this same
example, Comlurb was responsible for cleaning drains and manholes, and
the General Conservation Coordination was responsible for the underground
drainage galleries. With the integration of the two departments, it was
possible to triple the speed of maintenance services, without demanding
more labor or money.
The integration of this new department with the 1746 Hot Line also
brought about unprecedented gains for the city. In the past, conservation
actions were ruled by the administration or even by political orders. With
the establishment of a direct channel with citizens, the populations
requests became the departments main focus. Presently, 70% of the calls
to the 1746 number are for services provided by the Public Services and
Conservation Department.
UPP Social
UPP Social is the City Halls plan for the complete reintegration of
communities occupied by the Pacifying Police Units (UPPs) - the State
Governments public security project. The plan is based on the assumption
that law enforcement alone is not sufficient to solve all the problems faced
by these communities, which have expanded without any government
supervision or support. The goal is to extend public services to these areas
and bring them closer to the citys daily operation.
The main challenge for the UPP Social Project is to remove the population
from the informal status they had been living in for decades, by means of
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a gradual transition, making amends with this historical debt and bringing
an end to a long period of abandonment, both in terms of security and
infrastructure, besides providing basic services equivalent to those offered
in the formal city. A complete diagnosis of the areas with UPPs was prepared
in order to help elaborate measures and to trigger actions from the private
sector and NGOs.
To coordinate the project, the administration created a management unit
based within the Pereira Passos City Planning Institute (IPP), and agency
responsible for managing information about the city and developing strategic
projects aimed at guiding local government investments and articulating
partnerships with other levels of government, the private segment, and civil
society. The unit is also responsible for establishing permanent channels for
dialogue with community leaders and residents.
The project was implemented in 20 communities, among them Morro
dos Macacos, Borel, Cidade de Deus, Morro da Providncia, Rocinha,
Vidigal and Chcara do Cu. In these areas, the pacification program was
accompanied by urban conservation services, street lighting, cleaning and
waste collection, and real estate legalization. To bring health services, 17
Family Clinics and 24-hour Emergency Units (UPAs) were built until the
end of 2012.
The partnerships were key for the programs success. The Rio de Janeiro
State Industrial Federation (Firjan), through its Industrial Social Service
(SESI), brought training and professional inclusion for the communities
youth, for decades accustomed to be employed by drug lords. English and
Spanish courses were offered to residents of the communities located in
Rios South Zone to further encourage the regions vocation for tourism and
to benefit from the hosting of the 2014 Soccer Cup and the 2016 Olympic
and Paralympic Games.
Another project, conceived in a partnership between the Brazilian Service
for Small and Micro Businesses (SEBRAE), the Pereira Passos Institute, and
the Labor and Employment Department helped to formalize businesses in
the communities. Since August 2010, the project, called Empresa Bacana
(Neat Business), has helped 1500 small businesses to obtain their tax
registrations and permits.
The collaboration of the power utility company, Light, was key for the
reintegration of the communities. Aiming at a gradual transition to formalize
residents electrical connections, the company developed a program that
promotes the qualification of power grids, gives incentives for efficient
energy usage, and stimulates the residents registration with the company,
which makes them elegible for inclusion in a program that entitles them
to pay lower power rates. Additionally, it created a waste recycling project,
linking recycling to discounts in the power bill.
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ACTING BOLDLY
Bringing about structural and economic changes in the city involves taking
measures that may not be popular initially. This is the risk that is part of any
long term project aiming at accomplishing a broader purpose. Since it took
office, the city administration broke paradigms in public policies, always
envisioning a future scenario, even if it came at the expense of seemingly
unpopular measures.
This implied in challenging deeply rooted cultural habits. Some examples
are the implementation of the Order Shocks, reducing tolerance to urban
disorder, and the abolition of the automatic passing system in the citys
public schools, which only encouraged lack of commitment from the part of
students. The City Hall also focused on long term actions, building a sanitary
landfill that employs new technologies never seen before in Latin America
and focusing on technical rather than political criteria to implement its
cash transfer program, following the Federal Governments model. It was
also very firm in building partnerships with Social Organizations in order
to eliminate one of the administrations worse problem areas: the lack of
flexibility to purchase materials and hire personnel.
Urban Mobility
Bus Rapid Transit (BRT) Lanes)
The lack of urban mobility is one of the major challenges in any large city
around the world, and Rio was badly in need of facing this problem in
an efficient and sustainable manner. Mobility greatly impacts the citys
economy, the populations quality of life, and even housing policies.
The solution chosen by the City Government was both modern and accessible:
the implementation of the Bus Rapid Transit (BRT) in the city. The system
was created in the city of Curitiba and successfully introduced in several
capital cities around the world. It employs high-capacity buses in exclusive
lanes that are independent from traffic conditions. Boarding and unboarding
in the buses is faster and practical, similar to subways.
For the implementation of the new system, four new expressways were
designed to cross the city, mostly benefitting fastly expanding areas such as
the West and North Zones. The expressways will have lanes for automobiles,
but with priority for the BRT vehicles. The entire system will transport more
than 60% of the citys residents in high-capacity units that will include
trains, subways, and the BRT. Presently, public transit capacity doesnt even
cover 20% of the population.
Another advantage of the BRT is its implementation, faster and easier than
other modes of transport, and with the same efficiency. The solution takes up
only 10% of the investments necessary to build subways covering the same
distances. The choice for the new system reinforces the City Governments
practice of seeking original solutions to attain the best results. At a lower
cost and with a shorter implementation period, it will be possible to radically
change urban mobility in Rio.
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Travel times
56 Km total distance
53 stations
220 thousand people served
41 Km total distance
46 stations
400 thousand people served
40 min.
26 Km total distance
18 stations
110 thousand people served
100 min.
50 min.
BEFORE
AFTER
TransOeste
100 min.
TransCarioca
TransOlmpica
TransBrasil
Interconnected neighborhoods
100 min.
100 min.
40 min.
60 min.
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Social Organizations
One of the the current administrations innovations was to allow Social
Organizations, or not-for-profit entities, to be the City Governments partners
in managing some public facilities. The model has been successfully adopted
for health program management in cities like So Paulo and London. The
main benefit is the great reduction in government bureaucracy, ensuring
greater efficiency and speed for city services.
Social Organizations enjoy greater flexibility to hire professionals and to
purchase materials. Besides, their employees have quality targets to meet
and can be replaced if their performance does not satisfy the population.
In Rio, these partnerships have brought major improvements, especially
in the Health Department, which received with them a raise in its budget
from R$1.8 billion to R$4 billion in three years by the City Government,
executed through partnerships with Social Organizations. Results attained
by the end the third year were a 700% increase in the number of doctors
and technicians in the citys Primary Care System and the tripling of the
Family Health Programs coverage.
The law authorizing this kind of partnership and its monitoring mechanisms
ensures minimum risk levels for public money. Only previously qualified
Social Organizations with at least two years of experience can be the
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Rio in Order
One of the first problems mentioned by the population in the interviews held
for the Strategic Plan was excessive tolerance to the lack of order in Rio. The
complaint was that city residents learned to live side by side with informality
and disrespect to rules, further stimulated by the public administrations
culture of leniency and reflected in the generalized disrespect for traffic
rules, in the proliferation of unauthorized constructions, in the expansion of
irregular businesses and in illegal advertising spread through the city.
Under the point of view of public management, there was a historical lack of
integration between the City Government and the states law enforcement to
guard public areas. In the city, the City Guard, the Licensing and Inspection
Coordination and the the Urban Control Coordination, three of the most
important entities responsible for caring for urban order, worked in extremely
precarious conditions, without any motivation, and lacking focus.
A significant change in this situation was achieved with the creation of the
Public Order Department (SEOP) in early 2009, responsible for regulating and
inspecting economic activities, municipal order and the use of public spaces.
The City Guard and three Coordinations: Licensing and Inspection, Urban
Control, and Parking Inspection and Towing, were placed under its control.
The main purpose of the new department was to carry out an Order Shock
program. Officially implemented in eight neighborhoods in the beginning
of 2009, the operation employed 2 thousand city and state officials aided
by the Civil Police and state law enforcement agents to take minors into
custody, inspect retail and food trade, repress irregular street trading,
control illegal advertising and prohibit irregular parking practices, including
the flanelinhas, informal car guards.
In the first year of the new agency, another relevant initiative was the
formalization of street vendors. It was the largest registration operation
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carried out in the city. Thirty-five thousand people went to several Regional
Licensing and Inspection agencies that were set up throughout the city for
the operation. A total of 25 thousand vendors were granted permits.
In the summer of 2010, the operation concentrated on Rios beaches. In
addition to specifying requirements for vendors and their stands, the City
Government increased monitoring of sports activities with approximately
400 city guards and inspectors. Vendors were required to adjust to rules
and use standard equipment. Selling of certain foodstuffs that could
represent health threats to consumers was forbidden, like shrimp and
grated cheese, as well as cooking and preparing food on the beach.
Sports such as beach paddle and altinha, a kind of soccer game, were
restricted to defined areas, and pets were banned from the beaches as a
sanitary measure.
In 2011, the City Government launched the second phase of the Order
Shock, this time establishing Public Order Units (UOPs) in strategic points
of the city. Inspired by the pacification of slums, the project replaced
random and punctual operations for permanent ones. The initiative was
based on the lessons learned during the first two years of its efforts to
improve urban order.
The first UOP, the pilot for the project, was opened in the Tijuca neighborhood
with a team of 225 City Guard officers. Their actions were focused on
chronic problems such as irregular parking and informal guards, taking up of
sidewalks with tables and chairs, and illegal street trading. The operations
impacts were felt even in other areas like public security. During the first
month, the number of pedestrians robbed in the neighborhood dropped 35%.
The positive results of the pilot project quickly led to the implementation of
UOPs in the Downtown, Leblon, Ipanema and Copacabana neighborhoods.
The actions to bring order to the city were impressive. After facing initial
resistance, they were finally accepted and respected by the population.
A poll carried out by the Brazilian Social Research Institute (IBPS)
with 850 Rio residents showed that 70% of the people interviewed
acknowledged and approved the initiatives. The actions considered best
were the removal of homeless people from the streets (41%), demolition
of irregular buildings (24%) and repression of street trading on the
citys sidewalks (14%). Only 13% of respondents disapproved entirely or
partially of the order shock.
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showed that the performance of students in the citys schools who received
the benefit was 20% higher than those who were in the same situation but
out of the program.
The program expanded its coverage in 2012, doubling the allowance given
to children up to 18 years of age with disabilities and including youth from
pacified communities seeking professional qualification. Total investments
amount to R$155 million, and 540 thousand people are being benefitted.
Waste Management
For over 30 years, Gramacho, in Duque de Caxias, was used as the main
destination for Rio de Janeiros waste. More than nine thousand tons of
garbage coming from Rio and other cities in the metropolitan region were
dumped in the landfill, which in spite of its importance collected a series of
irregularities, among them the degradation of the mangrove on which it sat,
being dangerously close to Guanabara bay, threatening to pollute its waters,
and the unstable, muddy terrain causing constant geological changes.
On the first day of its administration in 2009, the City Government
published a decree creating a working group to solve the issue. Some
time later a bid was announced for the construction of a new landfill in
the neighboring city of Seropdica. The winner of the bid was responsible
for building a modern Waste Treatment Center (CTR) to manage all waste,
since its arrival at the collection stations until its environmentally sound
disposal at the plant.
The new plant counts with state-of-the-art technologies never used
before in Latin America to ensure proper waste management. One of the
innovations is the triple layer of waterproofing over the soil, made of
high density polyethylene (PEAD), and sensors connected to a software
program that detects any abnormality on the soil. Leachate, the liquid
produced by waste decomposition, will be converted into reusable water,
and the biogas will produce energy and be traded as carbon credits. The
opening of the CTR in 2012 kicked off a process to reduce greenhouse
gas emissions that will increase Rios efforts to meet the reduction goal to
which it committed in 2009, when the government announced the citys
sustainability plan, Plano Rio Sustentvel. The purpose is to reduce 8%
of emissions by 2012, 16% by 2016, and 20% by 2020. The dumps
existing in Rio de Janeiros metropolitan region are accountable for one
of the highest greenhouse gas emissions in the state.
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Preparing Leaders
Rios administration requires leaders who are qualified in different
management techniques and tools that help meet planned goals within
defined quality, deadlines and budgets to execute all its projects and
routines. It also intends to perpetuate the results management model based
on meritocracy, ensuring that career employees hold strategic positions for
the correct functioning of the government.
The first step taken in this direction was to reestablish the Joo Goulart
Foundation, an agency linked to the citys Executive Office, designating it
to develop Rios leaders. Together with the Administration Department, the
foundation identifies, develops, allocates, evaluates and motivates leaders
among the citys more than 120 thousand employees.
City Leaders
The Lderes Cariocas (Rio Leaders) project was launched in March 2012
with the purpose of identifying and developing leaders in the municipal
administration. Attracting over 1300 candidates among city officials, at
the end of an objective and innovative selection process, 149 of them were
chosen for the programs first class. The evaluations used adaptive random
testing including logical, verbal and numerical reasoning, besides a series
of profile and competence assessments conducted by the candidates
superiors following the competence model established after extensive
consultations with high performance officials from different agencies and
levels of the administration.
The programs first class includes 10 PhDs and 46 Masters, among employees
from all different levels of the City Government. A relevant group of Leaders
are public officials who, in spite of their potential, had never held leadership
functions before. They were approved on their own merit in the strict selection
process and are now being prepared for new and greater challenges.
Management Course
To equip Rios leaders with the latest management tools, the Joo Goulart
Foundation hired COPPEAD, Rio Federal Universitys MBA School. An
internationally renowned center of excellence, COPPEAD created an
extension program specifically designed for the City Government. During six
months, City Hall officials have classes on topics like Finance, Budget and
Controls, People Management, Leadership, Statistics, Strategic Planning,
and other subjects that are necessary to lead teams and projects in a complex
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Strengthening Meritocracy
Aligned with modern management practices observed in the private segment
and in leading international government agencies, the Rio Government
developed even more aggressive measures to intensify meritocracy in its
People Management area. Leaders are given individual goals which may
result in a bonus of up to four additional salaries a year when met according
to the goals in the Results Agreements. This extra motivation aligns the goals
of both government and leaders, improving management of the routines and
projects they require to serve the citizens.
CHAPTER 5
LOOKING TOWARDS THE FUTURE OF RIO
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LOOKING TOWARDS
THE FUTURE OF RIO
A MORE AMBITIOUS PROJECT
The first Strategic Plan developed by the City Government defined as
a horizon a new vision for the city in 2020, establishing clear goals to
be achieved in the short term between 2009 and 2012. The strategy
consisted in structuring a pragmatic plan with clearly defined directions.
Three years after its implementation and with the success obtained
in engaging City Governments functional body, as well as, effective
improvements in the city, city management decided to develop a new plan
that would follow this strategy.
The intention was to monitor and recalibrate previously drawn objectives
but with goals to be achieved in the following period, that is, between 2013
and 2016. This deployment would take High Performance Management to
a new level, thus consolidating the focus of the machinery of government
on professionalism and results, and reducing changes due to the political
climate. The new plan refined the first projects guidelines, making the
most of the learning obtained then. It was able to present more daring
goals since it was developed during a period in which the city presented
significant progress.
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to 8.0) and only 4% were not realized (score below or equal to 3.9). The
chart in the figure below demonstrates this good performance and shows the
distribution of fully, partially and not achieved goals.
The employees of the 19 agencies that signed the agreements in 2010
were awarded according to their performance and received a partial or full
14th salary and in some cases even a 15th salary. 82,912 civil servants
were benefitted (73.3% of the City Governments active employees). R$132
million were invested in bonus payments.
In 2011, despite an increase in the number of goals and the inclusion of
new agencies and their civil workers in the Results Agreements, the balance
was a positive one. This time, 88% of the goals were achieved, a 5% average
increase from the first agreement. Approximately 90,000 civil servants from
36 public agencies received a bonus. The City invested R$250 million
this year in the payment of bonuses, equal to the monthly payroll of over
100,000 active civil servants.
The goals achieved also represented objective benefits for the population.
The Family Health Program coverage rate was 3.5% in 2008 and reached
27.4% by 2011, prioritizing lower income neighborhoods in the city. In the
field of Education, 15,000 new vacancies in day-care centers were opened,
5,000 teachers were hired and 20,000 children improved their school
performance thanks to reinforcement classes. Major transport projects were
under way such as the TransOeste, almost ready, and the TransCarioca. The
governments accounts were sound and its investment capacity hit 17.9%,
a higher rate than the ones for So Paulo, Minas Gerais and the Federal
Government. ISS (service tax) collection also grew 16%. All these results
gave the feeling that High Performance Management and the Strategic Plan
were positive victories for the city.
Greater Optimism
Rios government requested a survey from Ibope that demonstrated that
80% of Cariocas were satisfied or very satisfied with their lives and that over
60% were optimistic about Rios perspectives. The perception regarding
security was well assessed and thus data from the Public Security Institute
showed that violent death rate had dropped 13.7% in 2011 and motor
vehicle theft dropped around 10%.
Moodys, Fitch and Standard & Poors credit rating agencies granted the city
investment grade rating. Moreover, in 2010, Rio was the Latin American
city that most received foreign direct investments totaling approximately
US$ 7 billion. Economic activity growth driven by sectors such as Oil &
Gas, Civil Construction, Retail and Pharmaceuticals, increased the number
of temporary and permanent jobs making the city attractive to foreigners
as well. Around 43% of all work visas granted in Brazil in 2011 were for
jobs in Rio de Janeiro. In its first year of operations, the Rio Negcios
(Rio Business) agency was consulted by 183 national and international
companies that were interested in developing projects in the city.
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Future Prospects
Rios confirmation as host city for the 2016 Olympic Games was one of the
important factors to drive growth and enhance future perspectives. The event
was a key point in requalifying the city and attracting new businesses and
investments. Moreover, theres the fact that Rio is also the stage for Fifas 2014
World Cup final, in addition to other important matches in this competition.
Given its new facilities and investments in the citys infrastructure, Rio tends to
receive increasingly more sports competitions and major events. For instance,
in 2012 there was the UN Conference on Sustainable Development - Rio+20,
with an attendance of 150 heads of state and government and in 2013, the
city will host the World Youth Day, the largest Catholic event in the world with
a forecast participation of 2 million pilgrims from over 80 countries.
Brazils favorable scenario also presents good perspectives for Rio. Some
of the pillars that support the thesis that unheard of favorable winds favor
the country include: pre-salt oil exploration that presents the possibility of
making the country the fourth largest oil producer in the world by 2030,
privatization of major airports and expansion of the domestic market with a
new middle class.
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- Adilson Pires
- Felipe Ges
- Alba Zaluar
- Fernanda Montenegro
- Alfredo Lopes
- Fernando MacDowell
- Alfredo Sirkis
- Fernando Molica
- Andre Eppinghaus
- Ferreira Gullar
- Flavia Oliveira
- Gilberto Ururahy
- Guilherme Langger
- Guilherme Studart
- Armando Strozenberg
- Augusto Ivan
- Guti Fraga
- Hlcio Tokeshi
- Beto Sicupira
- Hugo Barreto
- Israel Klabin
- Bruno Filippo
- Bruno Thys
- Jairo Werner
- Carla Camurati
- Carla Pinheiro
- Carlos Carvalho
- Joaquim Levy
- Carlos Tufvesson
- Carmen Fontenelle
- Carol Sampaio
- Jose Formoso
- Carolina Wambier
- Celina Carpi
- Celso Barros
- Jos Padilha
- Daniela Fiszpan
- Julio Bueno
- David Zylbersztajn
- Leandro Piquet
- Leda Castilho
- Lenny Niemeyer
- Elena Landau
- Lucia Hipolito
- Eloi Fernandes
- Philip Carruthers
- Plinio Froes
- Luiz Erlanger
- Regina Cas
- Ricardo Amaral
- Marcelo Madureira
- Marcelo Neri
- Ricardo Teixeira
- Marcelo Szpilman
- Ricardo Vieiralves
- Marcelo Torres
- Roberta Medina
- Marcos Avila
- Marcos Vilaa
- Marcus Vinicius Freire
- Maria Celeste Emerick
- Roberta Ratzke
- Roberto A. Medronho
- Roberto Dinamite
- Rodrigo Baggio
- Rodrigo Pimentel
- Mariano Beltrame
- Rogrio Chor
- Mauricio Assumpo
- Rony Meisler
- Mauricio Dinep
- Rosa Celia
- Rosiska Darci
- Sergio Bermudes
- Sergio Besserman Vianna
- Nireu Cavalcanti
- Nizan Guanaes
- Srgio Novis
- Silvia Ramos
- Patrcia Amorim
- Paulo Ferraz
- Paulo Gadelha
- Paulo Melo
- Paulo Moll
- Susana Herculano-Houzel
- Suzana Kahn Ribeiro
- Tnia Zaguri
- Paulo Niemeyer
- Vera Cordeiro
- Pedro Abramo
- Vik Muniz
- Wadih Damous
- Pedro de Lamare
- Walter Mattos
- Wasmlia Bivar
- Pedro Lus
- Peter Eduardo Siemsen
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Governance of Initiatives
When strategic initiatives were being delineated for the first Strategic Plan,
only one lead manager was appointed to be at the forefront of each project.
However, for all practical purposes, it became clear that each project also
depended on other managers from different departments or even external
entities. Thus, throughout the process, it was up to the Project Management
Office to seek these different interlocutors and articulate them in order to
solve bottlenecks that came up along the way.
In the new plan, the mapping of these interlocutors began earlier on, while
the initiative was being delineated. When designing each project, the City
Government would identify each manager in each department that could be
involved with the initiative and solve possible bottlenecks. Hence, in a school
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This new model provides better flow of information from the beginning of
the project and creates a collaborative environment so that any outstanding
issues or bureaucratic hindrances are more easily resolved. With this
structure, the strategic initiative can be implemented quickly and depends
less on intervention by the mayor, who is only called upon when an issue is
not solved among the participating managers.
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PART 2
HIGH PERFORMANCE MANAGEMENT
STEP BY STEP
INTRODUCTION
THE HIGH PERFORMANCE MANAGEMENT MODEL
Definition of Vision and Strategic Plan
1st Phase Definition of Vision and Goals
1. Diagnosis
2. Definition of Vision
3. Definition of Goals
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INTRODUCTION
The implementation of High Performance Management by Rios government
which began in 2009 is an experience that deserves to be shared with
other Brazilian city administrations. The methodology was developed in
partnership with McKinsey & Company, and although it is specific for Rios
context, it can be adapted by governments that seek management efficiency.
We believe that there are no ready-made recipes for efficient management,
but some successful models can inspire significant and long lasting changes.
In the following chapters, we will present our management model, detailing
the implementation tools in each stage, from the creation of a detailed and
ambitious Strategic Plan to the creation of institutional mechanisms for
delivery results monitoring.
In the appendix at the end of the book, we also describe the innovative
methodologies used to prepare Public-Private Partnerships (PPPs) that were
used in the city and that allowed the government approach private entities
and create a specific and efficient legal framework. Such tools allowed us to
carry out such emblematic works as the Porto Maravilha project the largest
PPP ever signed in Brazil.
Results of the City Governments innovations, dedication and commitment
can be observed in several accomplishments in the past few years. We
believe that experiences such as this one, that can add knowledge to public
administration in Brazil, deserve to be shared.
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This outlines the citys long-term aspirations organized in four pillars: social,
economic, environmental and political. In 2009, the Visions horizon was
set at 2020.
b STRATEGIC PLAN
These are the teams that implement and monitor the Strategic Plan. They
include the Projects Management Office, responsible for overseeing strategic
initiatives and the Results Monitoring Under-Secretariat, responsible for
overseeing Strategic Plan and Action Plan and Results Agreement goals. Both
teams were set up at the Municipal Executive Office.
d ACTION PLAN AND RESULTS AGREEMENT
These include the work plans details for each strategic initiative, for each city
department involved, considering goals, metrics and schedules and leading
to a results agreement which establishes a performance management model
based on meritocracy and on monitoring important indicators that assess
and award civil servants based on their achievements.
e MONITORING ROUTINES
These are the interactions carried out with the purpose of debating the plans
progress, solving eventual bottlenecks and engaging people towards delivery
of results. Routine meetings aim at facilitating integration of the different
agencies involved in the initiatives, given the high transversality of projects.
Participants include the Mayor, secretaries and representatives from the
Projects Management Office and the Results Monitoring Under-Secretariat.
114
These are behavioral aspects that influence the inclusion of High Performance
Management at all levels of City Government, such as adoption of transparent
and persuasive communication, talent development and leading by example.
CHART 1
c
Delivery
Support Teams
f
High
Performance
Culture
Long-Term
Vision
d
Action Plan
and Results
Agreement
Strategic
Plan
Monitoring
Routines
Delivery
Support Teams
f
High
Performance
Culture
Long-Term
Vision
d
Action Plan
and Results
Agreement
Strategic
Plan
Monitoring
Routines
DEFINITION OF VISION
AND STRATEGIC PLAN
The definition of Vision and Strategic Plan is the most relevant element
in the creation of a Plan for the city and, in general, is carried out in two
different phases: Definition of Vision and Goals and Strategic Plan Design.
Chart 2 illustrates a general view of the two phases, including the main
stages and the blocks of activities, major landmarks and main workshops
held to prepare a Plan for Rio de Janeiro. Following this, we present a
detailed description of each one of the phases.
117
CHART 2
OBJECTIVE
FINAL
PRODUCT
OBJECTIVE
FINAL
PRODUCT
118
2. DEFINITION OF VISION
ACTIVITIES
FINAL
PRODUCT
FINAL
PRODUCT
119
Workshop
3. DEFINITION OF GOALS
OBJECTIVE
FINAL
PRODUCT
OBJECTIVE
FINAL
PRODUCT
Strategic Plan
120
1ST PHASE
DEFINITION OF VISION AND GOALS
CONCEPT The first step for High Performance Management is to define
a vision for the city through an organized process in three activity groups:
diagnosis, definition of vision and goals.
when the 2020 vision was established and in 2012, when economic,
political and social changes in the city motivated a review of the 2012-2016
vision and the Strategic Plan and its vision for 2030.
123
1. Diagnosis
CONCEPT The initial diagnosis aims to establish a defined starting point
INTERVIEW SCRIPT.
PART I Vision for Health
1. Aspirations/Vision.
What aspirations should we have in order to develop the citys health sector?
And what is your vision for this mandate?
124
2. Mission.
What is your perception about current goals of the Health Department and
Civil Defense? Are these goals appropriate? Do they need to be refined? Are
they being achieved? (discuss goal by goal)
4. Goals, Impact.
Do you think these are the most appropriate goals to ensure that this
mandates health sector objectives/aspirations be reached? If not, what
would have to be redefined? Should we include other more appropriate goals
(new indicators)? Should this be defined by geography?
5. Goals, Development.
Are each of the goals associated to strategic initiatives that clearly help
achieve the desired result?
6. Initiatives, Impact on Goals.
We would like to discuss the strategic initiatives that are priority in the
current strategic plan. What do you think of each one of them? Have they
achieved the expected result? Is each one linked to a specific goal? Have
they produced an impact on the agreed goals?
7. Initiatives, Budget.
Has the budget for each one of these initiatives been well defined? Is the
budget included in the City Governments planning? Does the Mayor have a
good idea about the volume of resources necessary for the years to come?
8. Initiatives, Sustainability.
Is there some kind of private sector partnership for these initiatives, or some
of them, or a transfer of funds from state and federal governments that
might make them self-sustainable? Or even decrease the need for an outlay
from the City Government? (investment or operating expenses).
9. New Initiatives.
Which are the City Governments means areas (example: IT, Infrastructure,
Maintenance, Human Resources, etc.) that present the greatest impact
in your day-to-day (project execution and delivery)? What are the positive
aspects in interacting with these departments? What are the greatest
difficulties? How can this be improved?
11. Private Initiative Partnership.
How can the City Government take the opportunity of hosting events such
as the World Cup and the Olympic Games to encourage/develop the health
sector in the city?
technicians and city administrators from the main city departments. For
the interviews, a standard guide is used to collect perspectives about the
citys starting point, its main opportunities, challenges and aspirations. This
process will be added to the first perspective regarding the diagnosis that is
extracted from the interviews with the experts.
APPLICATION IN RIO /// Interviews were conducted with Secretaries from
126
APPLICATION IN RIO The 2009 Strategic Plan and the 2010 Master Plan
were used as a basis to understand the citys starting point as well as the
existing opportunities and challenges in each result area. During this stage,
the main advances of each area were examined since the launching of the
2009-2012 Strategic Plan, by identifying mistakes and successes in the
implementation of goals and initiatives. The main existing challenges in
each result area were also pointed out and whose solution was approached
by the 2013-2016 Strategic Plan, as well as opportunities presented.
EXAMPLE Chart 4 demonstrates the goals achievement assessment.
CHART 4
127
IBGE, RAIS, IPEA and other, according to the example illustrated in Chart
5. They were essential to the understanding of Rio de Janeiros reality.
EXAMPLE Panel with city data collection.
CHART 5
128
2. Definition of Vision
CONCEPT Once the citys starting point is clear, the long-term vision must
and it was called Vision Rio 2030. The future scenario that the City
Government envisions for the city can be translated into an ambitious goal:
to be the best city in the Southern Hemisphere to live, work and visit. In
addition to the vision and ambition for the city, four aspiration pillars were
defined: social, economic, sustainability and politics, as shown in Chart 6.
EXAMPLE Vision of Rio in 2030.
CHART 6
129
Rios ambition for the social area is to be the capital that simultaneously
unites best quality of life, an efficient primary health system and promotion
of healthier habits and customs for a population that is integrated to
education and culture. To this end, the following aspirations were defined:
To be the capital city with the best public education in the country.
To be the capital city whose primary health system presents the best
quality in the country, in both efficiency and care.
To be a national reference in reducing the housing gap in big urban centers.
To be a capital city with no extreme poverty, no extreme inequalities and
the most culturally and socially integrated one.
For the economic area, Rio was defined as a city that will be a city of
global prominence given its high attractiveness to business, reduced rate of
indolence, and continuous growth of its workers average income. To achieve
this, Rio shall be:
World reference in services and technology for the Energy sector and the
largest tourist center in the Southern Hemisphere.
Leading capital city in the countrys Creative Industry Development with
special focus on design, fashion, scenic and audiovisual arts.
National reference in business environment excellence, leading in
attracting and maintaining productive investments.
In the political arena, the city wishes to be recognized as one of the main
political and cultural centers in the global scenario. To achieve this, it shall be:
Recognized for holding major events and as a decision-making venue
for discussing global sustainability and economic development of emerging
countries.
A national reference on High Performance Public Management.
130
CHART 7
131
3. Definition of Goals
CONCEPT While the Vision, supported by the four essential pillars,
- 2012 period and, in its most recent version, for the 2013 - 2016 period.
Chart 8 illustrates the hierarchy adopted by the city to deploy the Plan into
goals and projects.
EXAMPLE Structuring of Rio de Janeiros Strategic Plan.
CHART 8
132
cities and even in other spheres with challenges that are similar to those of
Rio de Janeiro. The solutions and results obtained will serve as reference
cases in strategic planning discussions.
APPLICATION IN RIO In order to understand how the city could improve, it
was essential to understand how other cities that were in a similar situation
had acted. This national and international benchmarking was important not
only to generate new ideas on best practices in management, but also set
limits around the goals for the citys result areas.
EXAMPLE Charts 9 and 10 present examples of practices raised and
CHART 9
133
CHART 10
134
CHART 12
CHART 11
135
also the Strategic Plans main sponsor. Thus, the definition of goals shall
be made with his attendance. The workshop approach is more efficient
for discussions and submission of propositions, for it gathers managers
and experts.
APPLICATION IN RIO After the result area diagnosis was concluded, a
workshop was held at the City Hall with the participation of the Mayor, City
Secretaries and guests (experts in the different result areas). During the
workshop, result areas diagnosis was analyzed and this served as a basis for
participants to propose new guidelines, goals and strategic initiatives for the
2013-2016 Strategic Plan. Thus, following the discussion about the main
advances in each area during 2009-2012, the definition of the main existing
challenges and opportunities and benchmarking against international and
national references; the Secretaries and experts presented the elements to
be used in reviewing the plan from the point of view of guidelines, goals
and strategic initiatives. The proposals by the workshop attendees were
refined throughout the process and could count on contributions from other
members of the City Government as well as from civil society.
In this work session, participants helped define 10 priority result areas
for Rio de Janeiros development. These areas were identified through the
citys socioeconomic diagnosis and for being a structuring axis for City
Governments long-term vision. These areas include:
Health
Education
Public Order and Conservation
Economic Development
Housing and Urban Planning
Environment and Sustainability
Transport
Culture
Social Development
Public Management and Finance
136
CHART 13
137
2ND PHASE
STRATEGIC PLAN DESIGN
CONCEPT Once the citys vision and goals have been defined, it is necessary
to develop the actions that when implemented will enable the achievement
of these goals and objectives, and the plans focus is on establishing shortand medium-term projects with detailed scope, investments and work plan
feasibility.
APPLICATION IN RIO The main innovations in the Strategic Plan detailing
process were the inclusion of Civil Society, by means of the City Council,
and a thorough analysis of the initiatives physical and financial feasibility.
The City Council assembles 150 citizens, under the City Governments
leadership, to discuss the Strategic Plan and create a communication
channel between public management and civil society.
In addition to this, the physical and financial feasibility analysis of the
strategic plan is a crucial stage of thoroughly understanding the financial
and execution capacity of each proposed initiative. At this point, each
city department detailed its budget and funding sources for all projects,
adjusting goals to be achieved according com the City Governments
investment capacity.
EXAMPLE Synthesis of main activities, objectives and final products of
139
140
The people who were invited to participate in the Council received a book
containing the 2009-2012 Strategic Plan, the citys Action Plan and
Results Agreement and an invitation to participate in the forum. As part
of the process, they replied a survey about their Vision of the City, with
general questions about Rios current status and their future expectations,
in addition to questions about the 2009-2012 Strategic Plan and the
Olympic Legacy.
This first event included a presentation about the concept, the role of the
Council in the Strategic Plan, in addition to a diagnosis of the city. The
approach used to present the material was a poster gallery that showed
the citys evolution in key-indicators and presented some national and
international examples of cities that face similar challenges to the ones
faced by Rio de Janeiro. Moreover, posters were also used so that council
members could suggest changes to guidelines and strategic initiatives
outlined in the previous plan.
EXAMPLE Charts 14 and 15 show the rules of participation for council
CHART 14
141
CHART 15
At the end of the meeting, an opinion poll was held among participants to
evaluate the level of satisfaction with the event. The poll included aspects
such as general perception, content, materials, format and dynamics, in
addition to questions about specific aspects of the meeting that met their
expectations and improvements for future meetings. Poll results were
compiled, analyzed and shared with the Executive Office.
142
agencies and public enterprises of the city with over 100 participants to
translate the goals proposed by Secretaries during their workshop into
annual quantitative goals. These meetings lasted in average two hours and
were facilitated by external mediators, and whenever possible, counted with
the participation of at least one member from the Executive Office. A first
meeting with all members from the citys departments, agencies and public
enterprises involved is recommended in order to present forms to be filled
out, as well as to explain the structure of the Strategic Plan. After filling out
these goals, the Executive Office team assesses the boldness of the goals
based on the past performance of the indicators area.
EXAMPLE Chart 16 illustrates the model used to detail goals with an
CHART 16
143
together with managers and experts, with the purpose of achieving quantified
goals. The best technical solution is picked as a strategic initiative.
APPLICATION IN RIO Three meetings, on average, are held between
CHART 17
144
Treasury and the Project Management Office was responsible for the costs
and investment review (revenue source should be detailed in the budget).
Previously agreed upon goals were fine-tuned to meet the defined investment
capacity of the strategic initiative. The process ended in a workshop with
the City Council, so that Council Members could suggest revisions in goals,
guidelines and strategic initiatives.
145
146
CHART 18 B
CHART 18 A
147
analysis of all available resources calls for goals and indicators adjustment
in order to align them to financial availabilities.
APPLICATION IN RIO A series of meetings with FSOR and the departments
different areas that express their views on the guidelines, goal and initiatives
set forth.
APPLICATION IN RIO City Council members participated in 4-hour workshops
CHART 19
CHART 20
150
CHART 22
CHART 21
151
main activities: (i) Strategic Plan final adjustment review; (ii) validation
by the Mayor (or head of state, in the case of states or countries); (iii)
launching of the Plan.
It is important to analyze all information and align the Strategic Plan with
all stakeholders in order to launch the project in due time.
APPLICATION IN RIO Validation by the Mayor took place within the framework
of a workshop, and the launching took place in two events, one for Council
members and the other one as an open event with more than 500 citizens.
EXAMPLE A list of the activities that took place is detailed below with a
152
in the city, state or country is responsible for the final plans approval.
At this point, authorities validate proposals and grant the necessary final
priorities, especially in areas subject to budget limitations and deadline or
feasibility challenges to implement projects proposed.
APPLICATION IN RIO The implementation process is divided in two stages.
153
STRATEGIC PLAN
IMPLEMENTATION AND
INSTITUTIONALIZATION
Once the definition of the Strategic Plan is over, the new challenge is to
implement and monitor it efficiently. In order to achieve this, mechanisms
to oversee implementation must be created as is the case with organization
structures that focus entirely on project monitoring and management. The
Results Monitoring Office (EMR, acronym in Portuguese) and the Project
Management Office (EGP, acronym in Portuguese) were set up in Rio de
Janeiro for this purpose.
The first step in the Strategic Plan implementation and monitoring
stage is to create an action plan with detailed annual goals. This is an
essential step in the definition of structure, schedule, budget and key
implementation milestones for each strategic initiative. Each agency (city
department, foundation, company, public agencies) is responsible for the
detailed description of goals prior to the signing of the Action Plan and
Results Agreement, a document entered into by the Department as proof of
commitment to the goals described.
Another challenge is to involve all city officials and motivate them to
accomplish the established goals. One of the most widely used methodologies
in the private sector are the performance based bonus programs, which can
be adapted to the public segment. The Action Plan and Results Agreement
is a contract entered into by each agency and the Mayor, establishing a
payment of bonuses for civil servants who reach annual goals.
With the Results Agreement finalized, it is important to decide upon monitoring
routines, definition of a meetings schedule, presentations of indicators reports,
and definition of who will take part in the meetings. In the case of Rio, weekly,
monthly and quarterly meetings with the Mayor were scheduled.
Finally, it is important to highlight the High Performance Management culture.
As is the case with the Results Agreement, which is a formal mechanism to
guarantee High Performance, informal considerations as setting the example
in leadership behavior, the desire to collaborate among sectors and goals
cascading are important to strengthen the commitment to deliver results.
A detailed description of main activities in this stage is listed below.
Delivery
Support Teams
f
High
Performance
Culture
Long-Term
Vision
d
Action Plan
and Results
Agreement
Strategic
Plan
Monitoring
Routines
1. CREATION OF DELIVERY
SUPPORT TEAMS
1.1. Creation of the Results
Monitoring Under-Secretariat
Management is the main productivity leverage in an organization. This
concept is applied both to the public and private sector. The creation of a
strategic center for performance management is one of the key aspects in
public management transformation since it creates a role model and the
urge to change.
The Results Monitoring Under-Secretariat in Rio is responsible for the
Strategic Plans goals follow up. The Under-Secretariat Is also essential for
the Action Plan and Results Agreement since it interfaces the narrowing
down of the plans goals into more specific goals each department or public
agency has to achieve throughout the year.
The entitys team has to collaborate in the establishment of specific goals
for each department, follow up on their achievement and disclose results
both for the internal public at the City Government and the external public.
157
CHART 23
158
CHART 24
159
CHART 25
160
Delivery
Support Teams
f
High
Performance
Culture
Long-Term
Vision
d
Action Plan
and Results
Agreement
Strategic
Plan
Monitoring
Routines
2. ACTION PLAN
AND RESULTS AGREEMENT
This is the first step in the Strategic Plan implementation and monitoring.
The objective of the Action Plan is to provide detailed information on
each strategic initiative and explain the analytical structure, governance,
schedules, budgets and clear goals to each agency involved, in order to
ensure achievement of scope and strategic goals.
These goals were agreed upon in the Results Agreements, a key milestone
in the modernization of public administration. The tool rationale focuses on
results, satisfaction and effectiveness, more than rewarding those who stand
out in their duty for meritocracy. The model provides greater commitment
of the city administration with the City Governments results and helps
improve public service through clear objectives, showing administrators how
to achieve goals.
This phase is divided in four stages: (i) detailed work plan description
for each initiative; (ii) description of goal proposals by agencies; (iii)
assessment, negotiation and inclusion of proposals in Results Agreements
by the Executive Office and the agency; and (iv) detailed description of
annual goals by the Agencys internal structure. Once this final phase is over,
161
the resulting Action Plan will include goals, metrics, governance, schedules,
budget and an Action Plan and Results Agreement for each agency in order
to implement the Strategic Plan.
A description of main activities in this phase is listed below.
CHART 26
162
CHART 27
CHART 28
163
CHART 29
CHART 30
164
CHART 31
165
CHART 32 A
CHART 32 B
166
In this stage, the Mayor and the Executive Office team (Head, EGP and
EGM) proposed goals to strike a balance between what is desired and what
is plausible for the agency.
Goals are agreed upon by the Executive Office and each agency in the Action
Plan and Results Agreement entered into by the City Hall that connects the
achievement of previously detailed goals to the bonus reward.
In the case of Rio de Janeiro, the Action Plan and Results Agreement is an
important accountability instrument, not only for the departments, but also
for civil servants achievement of goals defined.
93 thousand civil servants collected R$ 140 million in performance bonuses
for goals achieved in the Action Plan and Results Agreement in 2012. In
2011, 39 departments joined in the process and 83% of goals agreed upon
in the Action Plan and Results Agreement were achieved.
The creation of the Action Plan and Results Agreement is described in
detail below.
The tangible result of the Agreement is translated into financial bonuses paid
to each city employee. The amount varies from one half to two additional
salaries per year per employee, depending on results achieved. This model
is similar to the performance bonuses paid in privately owned companies.
Goals are agreed upon between the Executive Office and each department
or public agency. These goals are not the major goals in the Strategic Plan,
but the more specific sub goals that are compatible with the activities of
each department in a crosscutting approach to all areas. These sub goals are
created by combining final result indicators like the IDEB grade in the case
of education, as well as indicators of tangible end products like the number
of vacancies in day care centers, and project indicators like the percentage
of children served. The idea is to use parameters that can be measured on
a regular basis.
Grades Definition
All City Departments entering into the Results Agreements are subject
to performance assessment through a grading system. If they exceed the
expected threshold, they receive a performance bonus. Grades are rated
from two to ten, and results are disclosed at the end of the year:
Grade 2 The indicator stays at the same level or below.
Grade 4 The indicator improves significantly.
Grade 6 The indicator improves significantly but the goal was not achieved.
167
168
SUMMARY
73,2%
19
39
82,4%
Chart 34 A and B shows a copy of the Results Agreement entered into by the
Mayor and the Health and Civil Defense Department. Chart 35 shows the
publication of the goals in the 2012 Results Agreement in the citys Official
Gazette - DORio.
169
CHART 34 A
CHART 34 B
170
CHART 35
171
CHART 36
172
f
High
Performance
Culture
Long-Term
Vision
MONITORING ROUTINES
Delivery
Support Teams
d
Action Plan
and Results
Agreement
Strategic
Plan
Monitoring
Routines
3. MONITORING ROUTINES
In order to implement the Strategic Plan as best as possible, the City Hall
created follow up routines, that is, regular interactions with the purpose of
debating progress in the Plan, overcome possible bottlenecks and promote
the commitment to deliver results. During these meetings the Results
Monitoring Under-Secretariat and the Project Management Office share
information gathered by city officials with the Mayor. These interactions are
essential for the implementation of the Strategic Plan and perfect to deal
with unscheduled situations and barriers.
Three different meetings are held with the Mayor on a regular basis:
a quarterly meeting with the departments full staff, a monthly meeting
with the team at the Results Monitoring Under-Secretariat and the Project
Management Office, and a weekly meeting with the Project Management
Office team. Even though each meeting has different objectives, the
common part in all of them is that the Head of the Executive Office takes
part and is briefed on progress in the Strategic Plan implementation and
can make demands and suggest changes.
173
MONITORING ROUTINES
CHART 37
175
CHART 38
176
Delivery
Support Teams
d
Action Plan
and Results
Agreement
f
High
Performance
Culture
Long-Term
Vision
Strategic
Plan
Monitoring
Routines
177
4.3. Cascading
The City Hall also encourages the replication of Results Agreements
monitoring routines within each department. Secretaries meet on a regular
basis with staff to check on goals achievement and deliverables.
More than that, some secretaries even post on the office wall a copy of
the performance bonus check received for goals achieved on the previous
year. This exemplifies the importance attributed to the Action Plan and
Results Agreement by Secretaries and encourages civil servants to focus on
achieving goals again.
178
181
THE IMPORTANCE
OF ALTERNATE FINANCING
Rio City Government has traditionally resorted to two financing models for
public works: own investments through bids or concessions. An example of
the latter are the kiosks along the citys beaches, the Riocentro Convention
Center and the Multipurpose Arena built for the 2007 Pan American Games.
In the transport area, contracts with Bus Lines and the Yellow Highway are
examples too. These projects are based on the February 13, 1995, 8.987
Federal Act on concession regimes and the permission to render public
services in compliance to article 175 in the Federal Constitution among
other provisions.
The major difference between these two models (bids for works and
concessions) lies in the fact that concessions granted for public works
change the focus of the undertaking. In the traditional model, the focus
is on the works, that is, the contracted partys revenue comes from the
payment collected for the assignment done. The companys economic flow
of expenses and revenue ends when the work is delivered and ready (except
for outstanding issues). Under this format, the contracting public agency is
responsible for the operation and necessary maintenance works.
In a concession, the focus is placed on the exploitation of a public service
as a business although is serves the needs and demands of the population.
In this case, the concession holder is a private company that pays the
costs during the construction phase and keeps revenue of the operation
understood as the exploitation of the public service. The objective of the
concession holder is the return on the investment through the exploitation
of the public service to pay for investment previously made and expenses
from operation and maintenance.
From this perspective, the approach of the private entrepreneur in a
concession is opposite to the traditional one. In the traditional model the
entrepreneur carries out what is included in the bid by the public agency.
The public agency in turn is the one that assesses the economic and/
or social demand of a given undertaking, drafts (or hires the drafting) of
projects, estimates costs involved and is responsible for the bidding process
for the construction work. In a concession, the private party estimates the
costs involved in the construction phase and future revenue to consider if
the project will produce the desired shareholder profitability.
Apart from these two formats, December 30, 2004 11.079 Act, together with
opinion 614/2006 by the Department of the National Treasury introduces a
182
APPENDIX
new format for projects in the country. The Act introduces general regulations
for bids and Public Private Partnerships in public administration. PPPs are
a key option to face historical problems in Brazil, like the still deficient
infrastructure, although it does not entirely replace the above mentioned
traditional formats. A Deloitte Touche Tohmatsu 2006 study describes five
advantages in PPPs:
The value of the investment can be distributed throughout the whole life
period of the asset and not only in one period;
Proven delivery track record both for the schedule and budget;
Some risks are transferred to the private sector and provide incentives for
appropriate asset maintenance;
The long term view can cut infrastructure costs, as well as construction
and general life cycle costs; and
Can include follow up service level indicators in contracts to foster a
strong customer service orientation.
Apart from these factors, another one is worth mentioning in Brazil,
considering the historic uncertainty with reference to payment capacity by
the public sector: the compulsory adoption of fungible and extra budgetary
collateral. Collateral must be unconditional and enforceable in case of
noncompliance by the contracting party, in this case, the public agency.
This provision guarantees service continuity. The act establishes that
collateral options can be linked to revenues, to special funds, guarantee
insurance; guarantee backed by international organizations or financial
institutions not controlled by the government, guarantee funds or a state
owned company set up with this purpose, apart from other mechanisms
granted by law.
Although this tool is hardly used in the country, it is gradually gaining
momentum with time and its dissemination.
As shown in Chart 39, low revenue generating capacity projects that
attract no interest from the private sector are traditionally implemented
under the figure of an Administrative PPP, since the public sector will
contribute with investment. As revenue generation capacity increases,
some alternatives become viable. Projects that are partially financed
without public resources, that is, are profitable but revenue is insufficient
for project self-sustainability, can be implemented by Sponsored PPPs or
by a Subsidized Concession. If a public service project can finance itself
totally, it is implemented under the Ordinary Concession modality. Finally,
private projects at the top of the revenue generation capacity pyramid are
implemented by an induction or stimulus policy if it is in the interest of
183
government but are financed by the private sector interested in the specific
project. That is, the lower the revenue generating capacity, the greater is
the need of direct government participation through the contribution of
public resources.
CHART 39
2
Projects that are financially
self-sustainable
RE
VE
NU
EG
EN
ER
AT
IN
CA
PA
C
ITY
4. Administrative PPP
Public Works Contracting
1
Private
projects that
are interesting
for the
Government
3
Projects with no public
resources
4
Traditional public projects
184
CHART 40
PUBLIC WORK
PPP
Subsidies
Collateral
Investment
Maintenance
Taxes
Charges
Fees
CITIZENS
PRIVATE
SECTOR
GOVERNMENT
Grants
Taxes
Charges
Fees
APPENDIX
GOVERNMENT
Investment
Maintenance
CITIZENS
CHART 41
INPUT:
Base studies
OUTPUT:
Cost
analysis X
Each options
pros
Economic
Feasibility
Macroeconomic
factors (with
financial
project)
INPUT:
Project duration,
inflation rate,
borrowings
OUTPUT:
Macroeconomic risks
exposure
186
Economic
Feasibility
Information
in the market
(with financial
project)
INPUT:
Technical
and financial
assumptions
OUTPUT:
Preliminary
financial
structure
INPUT:
Financial feasibility
assumptions
and results
OUTPUT:
Risk pricing and
allocation in
financial terms
GLOBAL BACKDROP
Europe has more experience than Brazil in Public Private Partnerships and
concessions in infrastructure project financing, since these instruments
have been used there for some time now.
According to the European Investment Banks Economic and Financial
Reports, 2010, one of the best contributions on PPPs in the EU in terms
of use and macroeconomic environment in the region is the study by BlancBrude et al. (2007). This study is an important PPP evolution analysis in
Europe and 2008 and 2009 figures were added by the EIB to the report
mentioned earlier and updated to 2011 with data from the European PPP
Expertise Center.
The European Public Private Partnerships system is very diversified and
each country has its own model according to its legal framework. Chart 42 A
and B shows that the United Kingdom is the country that uses the tool the
most, both in terms of contracts and values. Spain, France, Germany and
Portugal have 156, 111, 96 and 45 projects respectively.
CHART 42 A
159
ES
38
FR
28
DE
PT
23
11
IT
BE
NL
IE
OUTROS
APPENDIX
13
36
187
CHART 42 B
970
ES
156
FR
111
DE
96
PT
45
IT
37
BE
23
NL
20
IE
19
OUTROS
59
PPPs in these countries have traditionally been used in the transport sector
in the buildings and public equipment area (schools, hospitals, prisons) and
in environmental projects (water, wastewater treatment, waste management)
as shown in Chart 43 A and B that relates investments per sector for 2011.
CHART 43 A
23
Education
23
12
Transport
12
Environment
Health
Energy
SOURCE: EPEC, EIB
188
5
2
CHART 43 B
2,2
Education
1,0
2,3
10,5
Environment
Health
Energy
1,4
0,6
0,0
This modality has been used in Europe since the 90s and the United
Kingdom is the main example. More than 900 PPPs were implemented till
2009 for more than 90 billion in the health and transport sector as shown
in Chart 44.
CHART 44
20
15
Traffic
Offices
IT
Military
Environment
Equipment
Education
Other
5
0
Transport
10
450
400
350
300
250
200
150
100
50
0
APPENDIX
Contracts
Contracts
Value
35
30
25
Health
Billions of Euros
SOURCE: Partnerships UK
189
BRAZILS SCENARIO
Brazilian legal framework as far as PPPs are concerned is maturing, but
information available is still scarce. By the end of 2011, there was only one
signed contract at national level, 17 partnerships at state level as shown in
Chart 45 A and B and 30 at city level. The total sum of all of these projects
is less than 50 contracts, an average of almost six contracts per year since
legislation was passed in 2004.
CHART 45 A
MG
SP
PE
BA
DF
CE
RN
190
CHART 45 B
550
2.111
311
SP
1.990
997
PE
379 143
1.953
BA
592
619
104
DF
2.487
904
CE
519
RN
400
500
1.000
3.500 4.000
Stadiums
Highways
City Administration
Hospital
Sanitation
Prisons
Subway
Housing
APPENDIX
There are three reasons why this figure is not greater. Two are accounted for
by the legislation: the 3% net current revenue contribution limit imposed to
public agencies and the obligation that projects must exceed R$ 20 million
under this model. The third is an institutional one: companies, governments
and jurists are currently studying the legislation, considering and fostering
less ordinary ways to make projects viable in an environment with little
standardization and flexibility in use of federal government resources.
191
RIOS SCENARIO
The establishment of the Strategic Projects, Concessions and Public
Private Partnerships Under-Secretariat within the Executive Office to study
options to make projects feasible proved to be insufficient. December
22, 2009 Complementary Municipal Act 105 was passed to deal with
the subject in Rio de Janeiro City, together with April 13, 2010 Decree
number 32.120 on Regulations of the Guarantee Fund and June 21, 2010
Decree number 32.422 on Public Private Partnerships Municipal Program
Steering Committee Bylaws/ PROPAR-RIO, as shown on Chart 46.
CHART 46
PPP STEERING
COMMITTEE
Public
Order
1. Prepares
PPP Plans
Public Works
2. Approves Projects
Solidary
Economic
Development
3. Approves Contracts
4. Authorizes use of
Guarantee Fund
City Planning
5. Hiring Process
Attorneys
Office
Treasury
Executive Office
PPP Unit:
New Projects
Assessment
192
Key directions in the Federal Act were followed by the Municipal one as follows:
5 to 35 years concession terms
Contract values greater or equal to R$20 million
PPPs Annual financial contributions cannot exceed 3% of net current
revenue. Rio de Janeiro City Government must send the Senate and the
Department of the National Treasury all necessary information to check
compliance with this provision before each PPP contract. (Act 11.079, 1st
paragraph, art. 28)
Sponsored PPPs financial contributions equal or above 70% of the private
partners remuneration under specific legislation
Creation of Municipal PPP Steering Committee
Establishes type of collateral
Creates Guarantee Fund
Apart from the above mentioned provisions, the Under-Secretariat took over
more responsibilities. May 3, 2011 Decree number 33.733 changed the
name of the Strategic Project Under-Secretariat to Strategic Project, Public
Service Concessions and Public Private Partnerships Under-Secretariat. It
was not simply a name change but also a clear sign that the subject of
Concessions and PPPs are really part of the City Governments agenda as a
relevant topic.
PROJECTS
APPENDIX
193
NEXT STEPS
Strategic Planning
The new Strategic Plan is much bolder than the previous one and included
peoples participation in a more significant manner. Consequently scope and
follow up indicators of a series of projects were defined. Around 20 of these
projects can be implemented through concessions instruments and PPPs.
The following step is to gather detailed information on each one of them
and together with each corresponding department, give priority to projects
according to criteria eventually established and agreed upon to develop a
specific Action Plan with the detailed approach strategy for social, financial,
legal and environmental impacts of projects under study.
Manuals
Although the City Hall had already implemented PPPs, there was no guide
on the selection, assessment and bidding process. The implementation of
these types of routines boost local capacity to deliver PPP format projects
since they leverage resources (human, financial, etc.) to structure and
assess projects.
Furthermore, the idea is to make the citys regulatory framework more
comprehensive. Procedure manuals, as is the case in other countries, will
make rules more transparent and in turn will make the new partnerships
structuring process faster and sound. This will be the case with public
control authorities as the Prosecutors Office, the Audit Court and the
Office of the Controller as well as with the private sector in order to reduce
frequency of questionings and uncertainties.
A contract for the drafting of procedure manuals was entered into with the
World Bank to start with the analysis in an orderly manner. The objective
is to begin with the local reality, include tested good practices from other
countries and across the country.
This project is divided into three main phases: gather existent information;
draft and deliver guidance modules; and distribute produced material within
the City Government to draft seven manuals on the topics below:
Selection, assessment and bidding
Stakeholders functions and responsibilities
194
Regulation
APPENDIX
Partnership with the World Bank also includes the framework to create
a regulatory system for the city. The purpose of the partnership is to get
recommendations from the World Bank on the implementation of the
system based on best practices and the Banks 20 years experience on PPP
regulation. Specialists will present each topic with a set of options, describe
pros and cons, and suggest recommendations when appropriate concerning
the context of Rio.
This activity is a direct consequence of the growing number of concession
contracts and PPPs implemented in Rio. Public and private objectives do
not necessarily coincide. Consequently services provided by concession
contracts need regulations to protect end users. This is only achieved through
impartial conflict management, through the monitoring and compliance of
contracts and by the concession holders performance.
The regulatory authority has the duty to establish technical and commercial
service standards, set accounting standards used by concession holders,
monitor the operational performance of concession holders, regulate tariffs
and assess contract readjustments, resort to conflict resolution in trial
courts and subsidize the PPP Unit in the creation of new contracts.
The implementation of these options is another step in the direction of
transparency, speed and risk mitigation.
195
PARTICIPANTS
MAYORS CABINET
Mayor
Eduardo da Costa Paes
Vice-Mayor
Carlos Alberto Vieira Muniz
Chief of Cabinet
Luiz Antonio Guaran
Sustainable Development and
Metropolitan Governance Technical Office
Sergio Besserman Vianna
Cultural Heritage, Urban
Intervention, Architecture
and Design Under-Secretariat
Washington Menezes Fajardo
CDURP
Jorge Luiz Souza Arraes
Rio Negcios
Marcelo Haddad
CITY DEPARTMENTS, PUBLIC
COMPANIES, PUBLIC ADMINISTRATION
AGENCIES AND FOUNDATIONS
Administration
Paulo Jobim Filho
Welfare
Rodrigo Bethlem Fernandes
CET-Rio
Claudia Antunes Secin
Comlurb
Angela Nbrega Fonti
Public Services and Conservation
Carlos Roberto Osrio
Culture
Emilio Richa Bechara Khalil
Education
Claudia Maria Costin
Olympic Company - EOM
Maria Silvia Bastos Marques
Treasury
Eduarda Cunha de La Rocque
Geo-Rio
Mrcio Jos Mendona Machado
City Guard
Cel. Henrique Lima de Castro
Housing
Jorge Ricardo Bittar
IplanRio
Ricardo de Oliveira
Environment
Carlos Alberto Vieira Muniz
Public Works
Alexandre Pinto da Silva
Public Order
Alexander Vieira da Costa
Rio-guas
Mauro Alonso Duarte
RioUrbe
Armando Jos Guedes Queiroga
RioFilme
Srgio de S Leito
Health and Civil Defense
Hans Fernando Rocha Dohman
Pereira Passos
Ricardo Henriques
People with Disabilities
Georgette Vidor Mello
Transport
Alexandre Sanso Fontes
Tourism/RioTur
Antonio Pedro Viegas
City Planning
Sergio Rabaa Moreira Dias
COLLABORATORS
Angela Lopes
Camille Barcellos
Ana Guerrini
BOOK COORDINATION
Executive Office
Pedro Paulo Carvalho Teixeira
Management Planning and
Modernization Under-Secretariat
Jean Leonardus Caris
Andra Ferreira de Arajo
Results Monitoring
Under-Secretariat
Gisela Gasparian
Marcos Cruz
Patricia Ellen
Renata Maia