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Sochiís 2014 Olympic challenges
« on: March 01, 2010, 08:26:48 PM »

[b]Sochiís 2014 Olympic challenges[/b]

As the Olympic torch is passed to Sochi, Russia's organising committee is relying on an odd combination of exiled tycoons and student volunteers to build a gold medal-worthy 2014 Games.

Although officials say that while construction of sports facilities and infrastructure is already in full flow and Prime Minister Vladimir Putin highlighted the 500 billion rubles that private investors have already contributed, the Olympics are facing a shortfall.

Thanks to the crisis the investment is lagging behind what was expected, the premier told journalists in a video link between Vancouver and Sochi on February 11, RIA Novosti reported.
Exiled tycoon Telman Ismailov is among those thought to be ready to invest hundreds of millions of dollars into the Sochi facilities, while the government is trying to lure foreign investments to the city.

However, experts say all recent Olympic Games have proved to be unprofitable.

[b]Building infrastructure[/b]

Meanwhile things are already starting to take shape in the region and the road slaloming between Adler and Krasnaya Polyana, where the skiing events will take place, has already been built. But while the main ice rink and Ice Palace are almost completed, real estate and business analysts are still expecting a complete shake-up of the city.

"One can see a big hustle when entering the Olympics area," said Maria Dvoretskaya, a senior consultant at Jones Lang LaSalle, who visited the place two weeks ago. "Lots of lorries with construction materials are going here and there which means that works are actively ongoing."

Russian Railways, one of the state-run companies investing heavily in Sochi, said last year it will be bussing in students from its schools to help construction. The summer arrivals will be able to earn 25,000 to 70,000 roubles to build infrastructure, RIA Novosti reported.

[b]State and private funding[/b]

The state budget is likely to stump up the bulk of the funding, with some $7.6 billion in 2010 going to construction of sports facilities and roads for the Games in Sochi, as well as resettlement of displaced residents.

The main challenge will be finishing the ski centre before the FIS Alpine World Ski Championship, which will take place there in 2012, said Vladimir Potanin, one of Sochi's main sponsors, in Vancouver.

Potanin's Interros runs Rosa Hutor, one of the four ski resorts in Sochi, where building started in 2003.  The company has hired ski champion Berhard Russi as a designer of the piste, and is claimed to have invested some $1.5 billion in Olympic village infrastructure.

Gazprom has also been fuelling the changes in the Southern city, pumping $2 billion worth of investment into Sochi. The export monopoly will operate skiing and biathlon complex and the Soviet-era ski resort Alpica, which is set for modernisation.

It also invests in building one of the most decadent hotels in the area, the five-star Grandotel Polyana, while a new pipeline aimed for the Games is to be launched by mid 2010.

Sberbank and National Business Bank, along with the Krasnodar region administration are investing in the alpine skiing track Karusel (Carousel), while Oleg Deripaska's Basic Element is contributing to seaport construction and commercial real estate.

Upgrading existing hotels

The hospitality sector is also catering for the changes underway in the city with 5-star hotels springing up in the Olympic village in the Immeritinskaya Lowlands, though there will be more mid-range places to stay.

"There are about 20 Soviet-time hotels, like Rus (Russia), Sochi, Moskva and others, most of them are going to be updated," said Dvoretskaya. "But there are also many private investors that build hotels of different price range that are being built from the scratch."

Others are counting the cost of the Games in a different kind of green, with the World Wildlife Fund one of the most critical. The group has suspended its participation in Olympic projects saying that they are only environmental on paper.

"Olympstroi [the state run company in charge of tenders] can't force sub-contractors to eliminate ecological risks as all the green rules by current law are not compulsory," said Igor Chestin, WWF's chief in Russia. "Moreover the law is being adjusted to this project, as nature reserves' borders have been changed and sporting events in the park zones are now allowed".

The Western Caucasus region and the Immeritinskaya Lowlands are a unique habitat for many unique plants and animals that are on the verge of extinction. Ecologists say the endangered species are now just deleted from the endangered list and not preserved.

Some experts say that the changes on nature are taking their toll, with three workers living on the coast swept into the sea and expensive construction also floating away.

[b]Disabled access[/b]

However, Dmitry Chernyshenko, the president of the organising committee, assured the international community that the Sochi Games would be of international quality, with access for the disabled one of the top priorities.

[b]Sponsorship on track[/b]

The total sponsorship of the Sochi games has now hit $1 billion after Russian Railways signed a $115 million contract "[The sum of sponsorship contracts] is a record for the Olympics in the recent years," said Deputy Prime Minister Dmitry Kozak.

Russian railways will also invest 274 billion rubles ($9 billion) in the region's infrastructure, including building a railway to connect Adler airport to the key facilities.

The company has also mulling over using first class carriages as mini-hotels with the price set to be included in the train fare.