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Crisis is not an obstacle

3 (2009)
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This year is determinative for the organizers of the XXII Winter Olympic Games: the government appraisal is almost finished and mass Olympic construction starts.

Olympic budgetis sacred

“139 Olympic projects are being developed or already completed out of 186 projects that have been planned”, — said Dmitry Kozak, Vice Prime Minister of The Russian Federation. “Building and assembly operations have already begun in 21 projects”, — specified Vladimir Putin, Prime Minister of Russia. “Ten projects are being done ahead of schedule”, — reported Dmitry Chernyshenko, President of the Organization Committee “Sochi-2014”.

Just like year or year and a half ago “Olympic” officials are full of optimism. Nevertheless, lately they have to act circumspectly keeping in mind the crisis. “Due to difficult economic situation we have to intently follow up on the budget issues concerning our obligations. This refers in full to the Olympic expenditures”, — stated Vladimir Putin. He reminded that from all the planned appropriations only 20% will be directed to the construction of projects and the rest 80% will be used for the development of Sochi. Before the crisis the Olympic budget was assessed at 12 billion rubles, 7 billion of which were part of private capital. Now, according to Dmitry Kozak, the total cost is 218 billions rubles: 108 billion are government funds and the rest is private.

“In this situation the sum is estimated: calculations were made in prices of 2008 adjusted to the predicted rate of inflation, including the construction sector until 2013”, — stipulated the Vice Premier.

Contractors line up

According to Victor Kolodyazhniy, the president of the State Committee “Olimpstroy”, the crisis triggered landslide of prices for building materials, which will allow cutting the budget expenses for the project “Sochi-2014” approximately half as less again. “In these conditions it is not reasonable to pay the contractors according to the prices included in the earlier contracts”.

However, contractors are ready for any conditions. “The main advantage of the Olympic construction is a guaranteed financing and full production capacity load for the next three years”, — explained Alexey Bereznitskiy, the director of department of trade of the State Committee “Olimpstroy”. The main criteria for defining winners are their qualifications, technical equipment and experience in building similar projects.

In the beginning of this year “the first selection for the construction of the first major Olympic projects which are a bit more than forty” was announced. Big and small ice arenas for hockey with puck, Ice Palace of Sport for figure skating, short track and ice arena for curling were on the list. Major Russian and foreign companies were greatly interested in them, including Austria, Serbia, Finland, Bulgaria, and Turkey. At the same time the open selection for the construction of four and five-star hotel complexes “Maliy Akhun” for 3100 and 1300 rooms respectively located in the Imeret lowland were announced. Here the stake is also on the foreigners.

Let’s go for a ride!

At the same time energetic and transport infrastructures are developing in Sochi. “Together with the “Olimpstroy” we distributed polygons for preliminary storage of building materials. We have already received applications for 70 million tons of cargo”, — said Igor Levitin, Head of the Ministry of transport of Russia. For successful fulfillment of these applications the first cargo port with the capacity of 5 million tons and the second rail junction center with the capacity of 10 million tons are to be let in 2009.

By the end of the year a detour road around Sochi has to be ready which will let decongest the traffic in the Olympic capital during the Games. Project documentation for the building of railway line from the city of Adler to the Airport (line Adler-Airport).

According to the Ministry of Transport, on the whole the construction of the necessary transport infrastructure in Sochi will cost 400 billion rubles by 2014.

Example to follow

Giving credit to the activity of the contractors the officials are complaining of the inertness of the investors. There are few good examples to follow by now. In January of 2009 Bank VTB opened a credit line of 10 billion rubles for the Moscow company joint stock “USK MOST” to purchase equipment necessary for the construction of joint railway and highway from Adler to bottom station of ski resort “Roza Khutor”. Almost at the same time Sberbank gave the first tranche of 1 billion rubles from the credit line of 2,5 billion rubles to joint stock “Krasnaya Polyana” in order to build the third stage of sports and tourist complex “Gornaya Karusel” including the Olympic Media Village for 2,2 thousand places. However, “one of the major creditors of the Olympic construction will be ”Vneshekonombank (VEB) (Bank of External Economy)

— Vladimir Putin believes. “Under the conditions of the world economic crisis this step will make it possible for the developers to attract long-term funds on acceptable conditions”, — said the head of the government making it precise that the credit resources of the VEB will be directed “exclusively for payment of the works virtually made under constant control of their actual amount and cost”.

Government will make it secure

Dmitry Kozak as a chief curator of the project “Sochi-2014 has to constantly refute the rumors on the flight of the investors from the Olympic field. “Nobody has refused his obligations to build the Olympic projects. But if it does happen, we will replace these investments with the public ones”. At present we still don’t have investments for about 20 economically attractive projects”, — confessed Vladimir Putin. “Government will use all the possibilities to attract private investments and to create the most favorable conditions for businesses interested in Olympic development in a changed economical environment”, — promised Dmitry Kozak. He made a reserve that all the constructions that “cannot be used as Olympic patrimony and favor the development of the region will be temporary”.


Author: Maxim Fedorov, Sergey Derkachev