PtG Article 26.05.2008

Taxpayers and residents will pay dearly for Sochi Winter Games

In 2014, the Russian resort of Sochi will host the Winter Olympics. But already this mega-event looks set to cost Russian taxpayers more money than the combined costs of the last three Winter Olympics, and up to 4,000 local residents face evictions with compensation far below current market values.


 Houses by the snow in Sochi, the home of the Winter Olympics in 2014. Photo (c) istockphoto.c 

According to the Moscow Times, Vainshtok said that building transportation infrastructure alone could cost 13.5 billion US dollars, and the purchase of land could cost another 3.5 billion US dollars. On top of that are the costs of building Olympic facilities.

The Russian government originally set aside the equivalent of 8.5 billion US dollars for Olympic constructions but that has turned out to be not nearly enough. In March this year, Semyon Vainshtok, the head of the Olimpstroi state corporation responsible for preparing the Olympics, told members of the Russian Duma that the games would cost taxpayers three times the original estimates.

“A lot was missing in the estimates, and most of what was included was not confirmed by state experts,” Vainshtok told deputies.

The new estimates put the price of hosting the 2014 Olympics well above the combined costs of the three last three Olympic Winter Games in Nagano, Salt Lake City and Turin. And the price might yet rise. The Moscow Times also reports that Audit Chamber chief Sergei Sepashin has warned the Duma that the Olympic Games could end up costing 24 billion US dollars. 

In April, Vainshtok abruptly resigned from his post as head of Olimpstroi and was replaced by the mayor of Sochi.

4,000 people may lose their homes

Landowners and citizens in Sochi and nearby villages and towns are also likely to pay a high price for the Olympic Games.  A Russian news agency, Sobkor@ru reported in March that more than 4.000 people in Sochi will lose their homes in order to make way for an Olympic Park. Residents claim that the compensation offered for their property is minimal, and that many families will receive no compensation at all. 

VOA News has interviewed Valeriy Suchkov, head of the Sochi Property Owners Association, who says that authorities are cutting deals directly with investors and arbitrarily forcing people out of homes in prime locations. He says that Russian courts dismiss lawsuits against such sales, and that several homeowners therefore have filed complaints with the European Court of Human Rights in Strasbourg.

A chosen few will become rich

Ecologists, human rights activists, Sochi residents and politicians from the Russian opposition held a press conference in Moscow in April where they condemned the way the Olympic Games in Sochi is handled. They concluded that Olympic planners in Sochi were using the Games as a means to attain personal wealth at the expense of local citizens and Russian taxpayers.

One of the Sochi residents, Andrei Loginov, spoke to news agency and said: “When we found out that Sochi won the bid, we were beside ourselves with joy. We thought that this would bring investment to the city and would create new jobs. Now we understand that only a small chosen group will become rich, and the ordinary people like us will be left standing by the broken washtub.”

Garry Kasparov, the leader of the Other Russia Coalition for Democrcay in Russia, was more blunt in a recent comment in the Wall Street Journal: “This is only the beginning of  yet another massive shift of Russian assets from public to private hands - this time under the cover of the Olympic Rings.”