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.