By Valery Dzutsev
On September 8, Russian news agency RIA-Novosti reported that the
Russian government is increasing its material contribution to the Olimpstroy
state corporation from $4.8bn to $10.1bn. Olympstroy oversees construction of
facilities for the Olympics and the development of Sochi as a ski resort for 2008-2014. The
government’s resolution was posted on the website of federal regulations and
administrative acts on September 8 (http://www.itar-tasskuban.ru/news/article?type=city2014&i=14562).
In 2009, the government’s material contribution to Olympstroy for the same
period of 2008-2014 was estimated at less than $3bn (http://www.rosbalt.ru/main/2009/07/31/659713.html).
According
to the latest government documents, a significant increase in the funding will
start this year and will exceed $1.5 billion, instead of the previously planned
$0.3 billion. In 2012, over $3 billion will be allocated, instead of $0.7 billion,
and in 2013 over $2 billion instead of $0.5 billion. In 2014, the allocation
will remain as planned, at $0.1 billion.
The
material contribution of the Russian government to Olympstroy is only part of
the costs associated with putting on the Sochi Olympic Games in 2014. The
overall costs of the Olympics in Sochi
are estimated at nearly $30 billion (http://www.bbc.co.uk/russian/russia/2010/06/100607_sochi_budget_inflates.shtml).
Current oil prices still allow the Russian government to finance its
liabilities in Sochi,
but it may become a serious burden if the energy prices fall significantly. As
the price of the Winter Games in Sochi
rapidly climbs, the government may find it increasingly more difficult to foot
the bill over the next three years.
This is good as they are thinking about more facilities in Russia and good for Olympics.
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