Sochi Olympics: Russia gets gold in spending

Seven years ago, when the Russian city of Sochi won the bidding for the 2014 Winter Olympics , few would have predicted the cost of the hosting the games equal the gross domestic product of Guatemala.

At the time, President Vladimir Putin said the estimated cost would be around $12 billion. As it turns out he was off by $38 billion. With its $50 billion price tag, Sochi is the most expensive Olympics ever. Canada spent less than one-fifth the amount on the 2010 games in Vancouver, and the U.K. and China spent less for the 2012 and 2008 Summer Olympics—which are a far more elaborate affair.

Costly infrastructure

Most of the money was spent on building new roads, railroads, houses, hotels and conference centers. The sports-related costs directly related to the Games are about $6.4 billion, President Vladimir Putin and Prime Minister Dmitry Medvedev told CNN.

In this Sunday, Feb. 16, 2014 photo, Russian President Vladimir Putin, right, and Prime Minister Dmitry Medvedev watch an ice hockey game between Russia and Slovakia at the 2014 Winter Olympics in Sochi, Russia. Photo Credit: AP Photo/RIA-Novosti, Mikhail Klimentyev, Presidential Press Service

According to a New York research company Statista, many of the flagship projects came in immensely over budget. At $2.7 billion, the Laura Biathlon and Ski Complex ended up being five times more expensive than planned.

In addition, Russia not only had to build sports facilities, it had to build the city itself. Prior to the winning the bid to host the Winter Olympics, Sochi was a relatively quiet resort town. According to data from Bloomberg, about 73,000 workers constructed 260 kilometers of roads, 54 bridges, 22 tunnels and 200 kilometers of railway. That doesn’t include the addition of 19,000 hotel rooms, four ski resorts and 10 other Olympic venues.

Money in the pocket

The high cost has of the Games also brought corruption.
“Up to a third of the budget has been swallowed up by bribes and kickbacks by Russian government,” Gian-Franco Kasper, a Swiss member of the International Olympic Committee told The Christian Science Monitor.

Others put the scale of corruption even higher. Boris Nemtsov, a former deputy prime minister and an outspoken critic of Putin, studied corruption and the Sochi Games in May 2013. According to Nemtsov, abouto $24 billion was spent on Olympic projects and the remaining $26 billion disappeared through kickbacks and embezzlement.

Champions of the corruption race

Alexey Navalny, a Russian opposition leader and anti-corruption activist, has also published a detailed report on corruption in Sochi. Allegations include contracting important Olympic projects to friends and relatives of government officials, dramatic cost increases and missed deadlines. Among the more colorful examples was the construction of a $367 million Formula One race course by a company owned by a childhood friend and judo partner of Putin, despite the fact that auto racing is not an Olympic sport.

President Putin has dismissed the corruption allegations. “If anyone has concrete information on instances of corruption in relation to the Sochi Olympics project, we ask them to give us objective data,” he said in an interview with the BBC’s Andrew Marr. He added: “But besides talk, no one has given us anything.”