Boom town's bust shows cost of Brazil graft woes

As workers flocked to Itaborai during the oil industry's boom years, it seemed they had unearthed their own El Dorado -- until Brazil's worst graft scandal brought mass layoffs that have given it the air of a ghost town.
Home to 250,000 people, Itaborai -- just east of Rio de Janeiro -- welcomed thousands of new residents seven years ago when work began on the giant Comperj refinery owned by state-controlled oil giant Petrobras.
But a massive corruption scandal involving the firm and ensnaring dozens of politicians who pocketed hundreds of millions of dollars in kickbacks has shattered the dream.
Companies subcontracted to build the refinery are accused of forming a cartel that paid massive bribes to secure fat contracts in a decade-long scam worth an estimated $4 billion.
The greed of politicians and business executives who pocketed the illicit spoils has left them facing trial -- and cost thousands of workers their jobs.
The ongoing oil price slump has only made things worse.
Result: A workforce that numbered 35,500 two years ago has shrunk to just 9,500 today.
- Boom to bust -
Many of those who have been fired now shuffle through Itaborai's streets, with barely a cent in their pockets.
When the good times rolled, new hotels, apartment complexes and shopping malls mushroomed.
Today, in brutal contrast, boom has turned to bust with scores of businesses closed, their locked metal gates plastered with makeshift "for rent" signs.
The deepening fallout from the graft scandal has forced Petrobras to slam the brakes on planned investments this year and block contracts with contractors under investigation, including some of Brazil's biggest construction companies.
Comperj, an ambitious $13.2 billion project, has paid the price.
Petrobras told AFP the layoffs were already scheduled as the refinery -- currently 82.5 percent finished -- approaches completion.
But the job losses are a body-blow to former employees of Alumini, an engineering firm Petrobras scrapped its contract with in December.
"Since December, they've not paid me a cent. I don't have a health plan, I owe two months' rent. I begged them not to throw me out onto the street and I've been surviving thanks to colleagues who give me a little rice, some sugar," said Julio Alves da Silva.
The 42-year-old joined Alumini four years ago after arriving from the northern region of Salvador.
Some of his erstwhile colleagues do not even have a roof over their heads.
Itaborai's deputy mayor, Audir Santana, told daily Globo some 70 percent of the town's homeless are former Comperj site workers.
Around 2,500 Alumini employees are still awaiting their formal firing. The company, which has filed for bankruptcy protection, has yet to pay their final wages or sign release documents allowing them to seek new jobs.
Alumini told AFP it "never participated in any cartel" and that Petrobras was wrong to shelve its contract with the firm.
Joaldo de Oliveira, a 31-year-old from the northern city of Recife, is waiting to be given his severance pay so he can move on from "this hell."
"Had this scandal not broken, I'd still have my job," he said. "They would go on stealing, and us working. But they stole and we are paying the price."
- Flat broke -
Before the scandal hit a year ago, Marcos Paulo Pires da Silva, 33, ran a guest house that was usually full almost to bursting with Comperj workers. Demand was so high he opened two more.
Then came the Petrobras scandal.
"Today I'm flat broke," he said, with just two of 63 rooms rented out. A handful of workers are staying on his premises for free but will have to leave by April 1 as there is no electricity.
"My main customer (Alumini) is being investigated. They owe us 500,000 reais ($154,000) and we are going to have to close.
"We are selling off the furniture to pay the wages of the six remaining employees. Before, we had 44."
Gesse Dias Lopes, a 63-year-old mason from the neighboring state of Minas Gerais, is still holding out, sleeping on a lower bunk bed.
In a forlorn attempt to make himself at home, he has put up a calendar, a mirror and makeshift curtains to keep out the hot sun.
"Going home without money would be terrible," he said.
"There are a few odd jobs and I earn a little. I hope they pay me off so I can go home."