Russian official warns of massive cost overruns for Sochi 2014

Jul 19, 2011, 11:30 GMT

Moscow - Greedy contractors and sloppy management will likely make the 2014 Winter Olympics in Sochi, Russia the most expensive in history, a top government official said in a Tuesday newspaper interview.

Sergei Pavlenko, head of Russia's Federal Service of Financial and Budget Oversight, told the Rossiskaya Gazeta newspaper that the final price tag of the sports extravaganza will be between 13 and 18 billion dollars - most of it to be paid by Russian taxpayers.

Contractors have overpriced the cost of building infrastructure needed for the Games, particularly athlete housing and roads, by an average of 40 per cent, he said.

Government monitors lack numbers, time and skills to provide proper oversight of the massive construction underway in Sochi and surrounding regions, he said.

'Realistically, none of this is being monitored in any way, by any one,' he said.

Pavlenko singled out sloppy initial cost estimations as a particular problem, saying that contractors have repeatedly submitted and received official approval for work at locations where the ground is too soft to support major buildings.

The final construction prices for most Olympics-related structures in Sochi have skyrocketed because of the cost of reinforcements needed in all buildings to prevent them from sinking into the ground, he said.

Anatoly Chabunin, head of Russia's national road service Rosavtodoroga, told a Moscow press conference that his agency was also experiencing cost overruns at Sochi.

The region's road network dates back at some locations even to before the Soviet era and is useless as a base for bringing roadways up to international-standard, he said.

'We basically have to start with nothing, what's there on the ground right now is hard to call a road in our understanding,' he said. 'That's making the price of construction very high.'

The Russian Black Sea port of Sochi currently is primarily a summer resort catering to domestic tourists. Spectacular skiing is possible in the adjacent high Caucasus Mountains but basic conditions deter most vacationers.

The Kremlin hopes to use the 2014 Winter Games as a springboard to turn Sochi into a world-class winter sports resort.

The most expensive Winter Olympics ever were the 1998 games in Nagano, Japan at 12 billion dollars, according to most estimates. The 2010 Olympics in Vancouver Canada cost around 1.3 billion dollars.

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