March 28 - Brazilian President Luiz Inacio Lula da Silva (pictured) today launched a $878 billion (£586 billion) programme to upgrade Brazil's infrastructure ahead of the country hosting the 2014 FIFA World Cup and the 2016 Olympics in Rio de Janeiro.

The Government announced today that it will said spending on the programme would be 1.59 trillion reais (£586 billion/$878 billion) in the coming years, with 959 billion reais (£354 billion/$530 billion) earmarked for between 2011 and 2014.

Known as the PAC II – the Portuguese acronym for accelerated growth programme, part two – it includes public and private investment, including public-sector companies and the federal, state and municipal branches of Government.

A new Bus Rapid Transit (BRT) system, providing fast, high capacity public transport, was one of the key points of Rio's successful bid to host the Olympics which will be one of the main projects that PAC II will be expected to help finance.

Rio's airport will also be dramatically upgraded to accommodate up to 20 million passengers a year.

In spite of widely-publicised delays to the first PAC – it foresaw investments of 504 billion reais (£186 billion/$280 billion) between 2007 and 2010 but more than half of its 2,500 projects have yet to begin – the PAC II will also provide a boost to the election campaign of Dilma Rousseff, Chief minister to Lula and his chosen successor.

Rousseff is expected to tout the massive investments to voters as evidence that Lula's centre-left Government is rapidly improving the potholed roads, clogged ports and underfunded health system that dog Latin America's biggest economy despite strong growth in recent years.

The centrist opposition, whose Presidential candidate is expected to be Sao Paulo State Governor Jose Serra, has criticised the programme as propaganda, pointing to lengthy delays in projects.

The hugely popular Lula, who cannot run for a third term, anointed Rousseff the "Mother of the PAC," making it clear he sees it as a key campaign strength for her.

Rousseff is trailing Serra in opinion polls, but has recently narrowed the gap and is seen by many analysts as the favorite because she will benefit from Brazil's rebounding economy and the support of the charismatic Lula.

By 2014, the new phase of the plan will spend an estimated 278 billion reais (£103 billion/$154 billion) on the "My House, My Life" Government programme to provide low-income families with housing, while 104.5 billion reais (£38.5 billion/$57.7 billion) will go to upgrading the often decrepit transport system. The country's energy sector will receive 465.5 billion reais (£171 billion/$257 billion), according to a Government document.

As well as making Brazilians' lives harder, transport and other infrastructure bottlenecks prevent the country from achieving more lofty economic growth rates comparable to fellow emerging giants like India and China.