VARGINHA — In this western Brazilian city, in the middle of a dump area, a nondescript sign reads: "Here is an investment from the federal government."

Located on top of a hill, with a view of downtown below, the memorial was supposed to tell the whole story of the alleged "E.T. of Varginha." In January 1996, three girls said they saw an extraterrestrial being in a field, with reports from around the same time and place of other witnesses who said they'd seen a UFO and the reputed alien, who was then reportedly taken by the military to the local hospital.

The story was never officially confirmed (nor denied), and the E.T. was never seen again. But since then, the urban legend has spread, and interest for the events proved to be a commercial boom by attracting "UFO tourists" from across the world.

Last week, President Dilma Rousseff herself joined the hunt for the truth, declaring that she "respected the E.T. of Varginha."

Still, many are having their doubts, judging by the state of the abandoned construction site of the museum dedicated to the creature. The""E.T. Museum" has received an investment of more than 1 million reais ($450,000) from the federal government, but is for now merely the rusty skeleton of a spaceship, surrounded by weeds and used as a shelter by nine stray dogs.

In 2007, the Minister for Tourism allocated 828,700 reais ($1.1 million, accounting for inflation) to the town hall for the construction, which was interrupted in 2010. The Labour Party (Rousseff's Partido dos Trabalhadores), who back then controlled the local government, claimed they were missing 165,700 reais ($72,867) and halted construction of the museum.

Today's local government, dominated by the Democratic Labour Party said it had sent the project to the state-owned bank Caixa Econômica Federal to know how much money will be needed to finish the project.

Keep hope alive

According to the original plan, everything was supposed to be ready by December, but only about 40% of the construction has been completed.

Residents of Varginhas told Folha de S. Paulo that they were proud of the cult dedicated to the extraterrestrial being, but condemned the waste of public money. Many of them would rather see the site transformed into another attraction.

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Varginha's "flying saucer" water tower - Photo: ubirajararodrigues51

"This doesn't make sense, we already have enough E.T. sights in town," said Adriana Barone, a local 36-year-old cook. Among the attractions are a UFO-shaped water tower, statues, drawings and other E.T. kitsch that pops up all around Varginha.

"There's nothing wrong with keeping the legend alive and the hoping that there's life out there," said Eduardo Alves, a 37 year-old security guard. "But they've wasted money and, if they started building it, now they must finish it."

"It is not possible, nor is it in the interest of the town to change the object of the agreement with the ministry" explained Vice-Mayor Vérdi Melo, who cheered up after President Rousseff's recent visit to the town during which she offered a shout-out to the elusive creature.

"I have a lot of respect for the E.T. of Varginha," the President told a local radio station. "I know that those who haven't seen it know somebody who did, or have people in their family who did; but in any case, this respect for the E.T. of Varginha is guaranteed."

Beyond the museum, politicians from the town are already assessing the construction of a cableway between the memorial and downtown Varginha. The former mayor and representatives of the local Labour party were unavailable for comment on the interruption of the construction.

The Ministry of Tourism said that it had used 304,000 reais ($133,685) until now and that the rest of the money would be made available depending on the presentation of a new timetable from city hall.