Thursday, February 19, 2009

Russia cuts 2014 Olympics budget

Count the Sochi Winter Olympics as another casualty of the global economic slowdown.

The Sochi games are still five years away (we have the Vancouver games of 2010 to get through first), but Russia has announced that the budget for Sochi has been slashed by more than $8 billion because of the faltering economy.

There are those who are worried that Sochi might not happen at all. The selection of Sochi was a bit of a surprise - the city in southern Russia is somewhat off the beaten path. In pitching for the games though, Russia promised to go on a building binge, creating world-class facilities where few (of any class) currently exist.

But so far its been a difficult process - some land owners have asked exorbitant prices for their land, local officials have been accused of corruption and incompetence, construction is lagging behind schedule, and Sochi - which didn’t share in the economic boom that seemed to reshape Moscow and St. Petersburg overnight - needs far more work done on its basic infrastructure than first realized.

Concerns have gotten to the point that Salzburg, Austria - which lost out in the bidding for the 2014 games - sent a note to the International Olympic Committee that they could still step in and host the 2014, you know, just in case.

Still, I think it is a little early to declare the Sochi Games in that much trouble. Remember this piece from last month about the government in British Columbia desperately looking for money to finish the facilities for the Vancouver Games that are just one year away. Russia also has a ton of national prestige wrapped up in the Sochi Games. The Russians are still sore that their one and only time hosting an Olympics, the 1980 Moscow Summer Olympics, was marred by an international boycott that kept many countries that weren’t part of the Soviet bloc home.

Russia also is looking for Sochi to be an engine of economic development for that region of the country. Assuming the Games go off as planned, they will be unlike any Winter Olympics ever held. Sochi is sandwiched between the Caucasus Mountains and the Black Sea, a setting that creates a unique microclimate, giving Sochi, even in the winter, the type of weather you would expect in a sub-tropical city. The whole region was once the Soviet's answer to the Rivera - a coastal playground for the Soviet elite.

Still, the region, like much of Russia, suffered through years of neglect during the end of the Soviet Union and the chaotic transition of the 1990s. It all means there's a lot of work to do to prepare for the Olympics, a lot of work and now a lot less money to do it with.
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1 comment:

Anonymous said...

Ed, totally wrong.

A single lost in translation moment has created international misreporting.

The Deputy Prime Minister of Russia, Dmitry Kozak, told the PM, Putin, at a meeting Tuesday that the global economic downturn had reduced the cost of the raw materials needed for the Games.

So that along with cost efficienceshaving just finished the rigorous assessment of all the finalised plans, as is standard with all Olympic Games and Government projects, has seen Russia able to SAVE 15 percent on the Olympic project.

But because it's Russia, everyone loves to have a go, so it's a budget cut not a cost saving because prices have dropped... AP and AFP got it right, Reuters got it wrong and now corrected their piece, including an IOC quote that said the organizing committee budget hasn't changed. But the damage is done.

As for Salzburg, that was back in November and they immediately explained they simply responded to a local media question of 'if you had to host the Games could it be done'. As soon as they realised the quote was being used against Sochi, they made a statement apologising and explaining they wouldn't dream of trying to steal the Games from Sochi.

Besides, during the Austrian Bid they had no money and only 40 percent support, and now we're in a downturn it will be a lot worse!

Finally, before saying the Sochi project is lagging behind, why don't you see the latest report from the IOC who visited for a scheduled Project Review? It was widely reported that great progress has been made and the Games is totally on track.

It's easy for a journalist to try to get sensation from Russia - shame an amazing project like the Winter Games, which is transforming a region gets dragged into it.