News / Economy

    What's Next for Sochi's $50 Billion in Facilities?

    Sochi’s Morning After: $50 Billion In Infrastructurei
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    February 25, 2014 1:28 AM
    Now that the Sochi Olympics are over, the future of the huge investments Russia made in them are a huge question. James Brooke reports from Sochi.
    James Brooke
    This is Russia’s semitropical southern corner, where you can ski in the morning and swim in the afternoon - in midwinter!
     
    For the Winter Olympics, Russia spent $50 billion on an international airport, new docks for cruise ships, a railroad and highway from the sea to the mountains, four world-class ski areas and almost 50,000 hotel rooms - all for 17 days of sports competition.
     
    Now the crowds are going home, jamming the new airport terminal, and residents left behind worry that the resort was overbuilt.
     
    The press center next to Olympic Park - five times larger than Moscow’s Red Square - is to become a shopping mall
     
    One Olympic rink is to be dismantled and shipped to Siberia. Other facilities will be kept intact, to train future Russian Olympic skiers, skaters and sledders.
     
    A boon for sports enthusiasts
     
    The new winter sports areas are a hit with Russian skiers and snowboarders used to substandard facilities.
     
    Sasha Geraskovski, a skier from Moscow, paused to chat atop Gornaya Karusel, the only ski area open to tourists during the Olympic Games.
     
    “I always used to go to Europe, to Austria or France,” for skiing, said Geraskovski, a marketing specialist. “Now I see Russia can give me all I need. I have good hotels, good food and good hospitality right here, and great snow. Next time, I will spend my vacation right here."
     
    But is a 40,000-seat stadium too big for a resort city of 340,000?
     
    An expensive trip for Russians
     
    Russians accounted for an estimated 90 percent of all visitors to the Winter Olympics. But will they come back to Sochi without the Olympic Games as a draw?
     
    City tourism officials complain that taxes make a flight from Moscow to here more expensive than a flight to Turkey.
     
    Yulia Malorodnova, deputy chief of Sochi's tourism office, said high air fares account for 70 percent of the total cost of a typical package tour.

    "Unfortunately, we feel, airline flights are very expensive," she said. "It's because of taxation... there is an 18 percent VAT on all domestic flights. But if the same company flies for example to Egypt, there's no tax on that flight."
     
    Stalin's dacha a hotel?
     
    Anatoly Pakohomv, Sochi’s mayor, said market forces will solve the problem of too many hotel rooms.
     
    "The most important regulator is competition, and competition is very tight right now,” Pakhomov said. “The problem of high prices that we've had, I think the market will even that out.”
     
    Exemplifying Sochi’s preference for market-led solutions, local authorities have a novel plan to finance a museum at the hillside dacha that Stalin once used. Next year, they will open a boutique hotel in a wing of the dead dictator’s Black Sea retreat.

    • 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.

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    Comment Sorting
    Comments
         
    by: Gennady from: Russia, Volga Region
    February 24, 2014 10:52 AM
    At least 20 % of all the Russian are sure that the Sochi’s $50 Billion expenditure was an ill spent whim of the ruler, absolutely unrelated to more urgent and higher priorities’ needs of the country, predominantly northern and impoverished beyond the Moscow Ring Road. The most optimistic forecasts are that there will be just 0,3% boost to the country’s GDP: the mountain of all spent resources gave birth to… a mouse.

    Although the huge country badly needed modernization of its substandard roads, logistics infrastructure instead. All of the Sochi’s facilities will soon be neglected and looted as volunteers leave the place. Even in-numerous prosperous Russians will certainly prefer to have their holidays and vacations in more civilized places like Turkey, Greece and Italy than in semi civilized Sochi.

    by: Vladimir from: Russia
    February 24, 2014 9:35 AM
    Sochi will be looted by local criminal thugs... America mistake is in thinking that Putin controls Russia... but really Russia is out of control. Putin controls Moscow. and he tried to control other regions but really Russia is out of control. it is criminal gangs who are in control in Russia. someone called Russia a "mafia state" - that is very true.

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