Russia’s Winter Olympic Games, starting in a few weeks in Sochi, are very expensive. With a revised budget of $US51 billion, they are the most expensive Olympics on record, an insane fact when you consider Winter Olympics are usually cheaper than the Summer Games.
Where has all the money gone? That’s the question Joshua Yaffa tries to answer in a long Businessweek article published today.
As an example, Yaffe points to the huge new road and railway links being built to Krasnaya Polyana, a mountain resort hosting the ski and snowboard events for the games. The 31-mile transport link was a necessary construction as there were no suitable areas for these events in Sochi itself — the engineering for the project was notably difficult.
Even so, the cost of the road and railway links seems bizarre. At over $US8.7 billion it’s easily more than the entire budget for the 2010 Vancouver Winter Olympics, Yaffe notes, and a stupidly big number when you consider that the entire games were originally budgeted at around $US11 billion.
Now, almost by design Olympic budgets overrun — last year one report described the proposed budget for an Olympic bid as “more like a fictitious minimum that is consistently overspent” — but Sochi’s budget seems inexplicably big. One could take it at face value — the games are clearly meant to be one of the shining glories of the Putin era, so everyone is spending lots of money with government blessing on making it great. On the other hand, you could just assume it’s all corruption — Russian opposition figures have called the whole thing a “monstrous scam” with up to $US30 billion in funds stolen.
What’s nice about Yaffe’s article is that it shows how — as always — the reality is more complicated than that. “The private investors helping fund Olympic construction are most likely motivated less by the pursuit of large profits,” he writes, “than a tacit understanding that under Putin they have certain obligations to the Kremlin and the nation at large.”
Still, the runaway costs will almost certainly not go unpunished. According to the Businessweek article, one Russian official told Stephen Sestanovich, a former U.S. ambassador-at-large to the former Soviet Union and now a fellow at the Council on Foreign Relations, “When all the celebrations are over, then the prosecutors come in.”
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