Putin Sochi Bill Seen Rising $7 Billion After Flame Dies

[interestrateripoff]

http://www.bloomberg.com/news/2014-02-12/putin-sochi-bill-seen-rising-7-billion-after-flame-dies.html

The record cost of President Vladimir Putin’s Winter Olympics will keep climbing long after the athletes have gone home and the flame goes out in Sochi.

Russia, which is already spending 1.53 trillion rubles ($44 billion) to host its first Winter Games, may have to spend as much as $7 billion more in the next three years just to maintain the venues and other new infrastructure around Sochi, two government officials involved in the planning said. That’s about what Canada spent on the 2010 Vancouver Olympics.

Nobody knows what the final tally will be because the government hasn’t decided exactly what to do with the venues yet, the officials said, asking not to be identified because budget talks are confidential. What’s clear is that in the rush to get Sochi ready, the post-Olympic plans weren’t thought through. As a result, annual spending will be tens of times higher than estimated, straining budget, they said.

..

Putin, who personally oversaw Sochi’s transformation from a sleepy Soviet backwater on the Black Sea into a glimmering tourist and sporting attraction, told some of the area’s 400,000 residents this week that they shouldn’t rely on federal funding for further development.

“Additional investment can’t really be expected after the enormous resources invested here,” Putin said at a meeting with Sochi residents on Feb. 10. “For all the love for Sochi, it now must be developed through very different means.”

Two-Year Curiosity

Drawing Russian tourists away from traditional resorts in Turkey and Egypt may be almost as hard a task as attracting foreign visitors, Irina Tyurina, spokeswoman for the Russian Tourist Industry Union, said by phone today. Without them, the infrastructure won’t make a profit, she said.

“People will come to Sochi for the first two years out of curiosity, then the flow will dry up,” she said. “The state isn’t systematically promoting Sochi as a resort, and that’s no less of a large-scale task than preparing for the games.”

..

While Putin and other senior officials are betting the investments by state and private companies in Sochi will lure enough tourists to make the expense worth it, previous Olympics show such goals are rarely met, according to S&P’s.

Over the past 50 or 60 years, only a few cities, including Los Angeles in 1984 and Barcelona in 1992, have seen their economies and finances improve as a result of hosting the Olympics, Karen Vartapetov, associate director of S&P’s Moscow office, said by e-mail yesterday.

So who's booked a holiday in Sochi post Olympics then?

Considering it's location and the civil unrest a short distance away I'm guessing turning it into a tourist attraction is going to be rather difficult.

[juvenal]

My Sochi holiday blog...

"And on this very spot", I said to the wife. "The Team GB entrant crashed, when he came fifteenth in the early downhill heats. It makes you proud..."

[Errol]

No difference between Sochi and any of the other Olympic/Winter Olympic venues. Almost universally they've all turned into white elephants and sit unused/crumbling.

[juvenal]

No difference between Sochi and any of the other Olympic/Winter Olympic venues. Almost universally they've all turned into white elephants and sit unused/crumbling.

Vanity projects by willy-waving Heads of State.

[Errol]

Vanity projects by willy-waving Heads of State.

Not particularly. I think they serve a purpose and help to highlight regions etc etc. I think it has already been calculated that the investment coming into Russia following the games/as a result of the games will make it all worthwhile.

$30 billion is peanuts. One or two good deals with the Chinese could make this in 5 minutes.

Also Putin has taken every opportunity to meet the Chinese and other heads of state - important meetings which are shaping the future of monetary systems and the world.