News / Europe

Money Spent on Sochi Games Raises Questions

An aerial view from a helicopter shows the Olympic Park in the Adler district of the Black Sea resort city of Sochi.
An aerial view from a helicopter shows the Olympic Park in the Adler district of the Black Sea resort city of Sochi.
The flame will be lit later this week to open the 2014 Winter Olympics being staged at the Russian Black Sea resort city of Sochi.
 
But behind the pomp are many questions as to why this is the most expensive winter games ever held, whether the spending is justified and who is personally benefiting.
 
Take a warm place with palm trees with mountains nearby and pour the astounding sum of more than $50 billion into it. And there, on the Russian shore of the Black Sea, the venues and infrastructure for the 2014 Sochi Winter Olympics are ready to open this week.
 
Olympic Games are often linked to the will of political leaders of the host nation. And under the watch of President Vladimir Putin, Russia poured massive amounts of capital into Sochi.
 
Russian scholar Leon Aron wrote recently on the American website Politico, “In putting his Winter Olympiad near a beach resort, Putin seems to be possessed of what might be called the ‘Peter the Great’ complex: emulating the Tsar who built his capital, from scratch, from a swamp.”
 
No other Winter Olympics has ever cost this much. The 2010 games in Vancouver, Canada totaled roughly $7 billion. That’s less than one seventh what Sochi has cost.
 
Most of Sochi’s infrastructure to support the games had to be built from scratch. Not just the main stadium and other sports venues but also the Olympic athlete’s housing and new hotels for spectators.
 
Roads, electrical infrastructure and sewage treatment facilities were enlarged.
 
There is also an advanced technological infrastructure to handle the massive demands imposed by presenting – and covering - the games in this digital age.
 
Costs questioned
 
The costs have raised many questions from activists demanding accountability and justification.
 
Putin said that a review in 2012 by the Russian government’s Audit Chamber found some $500 million in cost overruns that reflected what he termed the honest mistakes of investors who underestimated the costs of construction.
 
 
In the wake of that audit, three criminal investigations were launched against employees of Olympsrtroy, the state company responsible for the creation of Sochi 2014. But no court actions have reportedly been taken.
 
Critics allege corruption.
 
In a 2013 report, titled “Winter Olympics in the Subtropics: Corruption and Abuse in Sochi,” Russian opposition politician Boris Nemtsov slammed the massive spending.
 
He alleged that out of the more than $50 billion spent on Sochi, “the total scale of the embezzlement is about $25-30 billion or about 50-60 percent of the stated final cost of the Russian Olympics.” 
 
Putin dismissed the report, saying “If anybody has got this information, please show this to us. But so far, we haven’t seen anything except speculation.”
 
Another critic is Alexy Navalny. The anti-corruption activist has created a website – sochi.fbk.info – that spotlights not just the costs but also benefactors of the spending.
 
The examples cited include the main 40,000-seat Fisht Olympic Stadium.
 
First projected to cost about $49 million, Navalny said the real final cost could well exceed $520 million and may total more than $700 million. He said the stadium’s main contractor, Ingeokom, has a history of massive cost overruns and completion delays.
 
Ingeokom was also the contractor that completed the Iceberg Skating Palace at the games at a total cost that Navalny’s website said came to over $272 million – two and a half times what the activist claims it should cost.
 
Navalny also alleged cost overruns with the construction of the railway and highway linking the resort of Adler in the coastal area to the mountains of the Krasnaya Polyana region, where skiing events will be held.
 
Navalny’s site says the total cost of the transportation link came to $8.7 billion, nearly twice what was anticipated, and exceeding the total cost of the 2010 Vancouver Winter Olympics.
 
Another new highway in Kurortnyi that is 17 kilometers long and built to get people to and from Olympic event came in well over projections at $2.5 billion, Navalny said.
The Olympic hockey rink will have seats for 7,000 spectators.  The cost of building it, $104 million, is said by Navalny to equal the cost of 3,400 regular Russian hockey facilities.
 
Links to Putin alleged
 
Media reports have questioned the links of the construction projects to prominent Putin loyalists.
 
That Shayba hockey rink was built by contractor Igor Nayvalt, who is reported to be well connected to the Ozero cooperative society. One of the significant shareholders of Ozero is Putin.
 
Also connected to Shayba, according to the publication Forbes Russia, is Ural Mining and Metallurgical Company President Iskander Makhmudov, and his junior partner - billionaire Andrei Bokarev.
 
Forbes Russia also reported that billionaire Arkady Rotenberg, the Chairman of SMP bank and a friend of Putin since childhood, landed $7.36 billion in state contracts connected to the Sochi games. 
 
A group called the “Anti-Corruption Foundation,” led by former bank manager Vladimur Ashurkov, said three close Putin associates including Rotenberg benefited from the construction of a rail line. It named Gennady Timchenko, a partner in SK Most Construction Company and the head of Russian Railways, Vladimir Yakunin.
 
Despite the questions about the construction, the Russian government has had little response. Said opposition politician Nemtsov: “Not a single criminal case of fraud, embezzlement, bribe-taking, or kickbacks has reached the courts.” 

Maria Kovalskaya contributed to this report.

Sochi's Olympic venues:

  • The Bolshoy Ice Dome illuminated at night in Sochi.
  • An aerial view from a helicopter shows the Olympic Park in the Adler district of the Black Sea resort city of Sochi.
  • The Iceberg skating arena and Fisht Olympic stadium in Sochi.
  • An inside view of the Adler arena speed skating venue in Sochi.
  • The RusSki Gorki Jumping Center in Sochi.
  • The Rosa Khutor ski resort, of Sochi.
  • An aerial view from a helicopter shows hotels and residential houses constructed for the 2014 Winter Olympics in the Adler district of Sochi.
  • The Bolshoy Ice Dome, Iceberg skating arena and the Fisht Olympic Stadium, Sochi.
  • The Sanki Sliding Center, east of Sochi.

Jeffrey Young

Jeffrey Young came to the “Corruption” beat after years of doing news analysis, primarily on global strategic issues such as nuclear proliferation.  During most of 2013, he was on special assignment in Baghdad and elsewhere with the Special Inspector General for Iraq Reconstruction (SIGIR).  Previous VOA activities include VOA-TV, where he created the “How America Works” and “How America Elects” series, and the “Focus” news analysis unit.

You May Like

Mali's Female Basketball Players Rebound After Islamist Occupation

Islamist extremists ruled northern Mali for most of 2012, imposing strict Sharia law, and now some 18 months later, the region is slowly getting back on its feet More

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

Many Chinese-made products go unsold, for now, with numerous Vietnamese consumers still angry over recent dispute More

Koreas Mark 61st Anniversary of War Armistice

Muted observances on both sides of heavily-armed Demilitarized Zone that separates two decades-long enemies More

This forum has been closed.
Comment Sorting
Comments
     
by: Geoffrey from: kenya
February 03, 2014 1:49 PM
corruption is widespread across the EU in procurement esp among constructors(162billions) Russia is no saint.just politics.admit Putin is doing a good job.trillions lost in Iraq or that was Bush the Great,eh!this warped world!

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid