Whose Idea Was It to Build a Winter Resort in the Warmest Part of Russia?

Putin's biggest critic talks about the troubles facing the Sochi Winter Olympics.
sochi olympic site banner.jpg
The Fisht Olympic Stadium and other Olympic venues under construction for the 2014 Winter Olympic games in Sochi on March 7, 2013. (Reuters)

Boris Nemtsov has occupied many roles in post-Soviet Russia, both in government and in the parallel polis that is oppositional politics. He was first elected governor of Nizhny Novgorod, whose successful economic reforms in that region carved a political pathway that would ultimately take him into the deputy premiership under the Yeltsin government. Nemtsov has also been a dogged opponent of Vladimir Putin for the better part of a decade, warning as early as 2004 of a creeping dictatorship. He's perhaps best recognized by the series of reports or white papers that he has co-authored on the state of Russia's economy, the corruption at the heart of Gazprom, and Putin's rumored multi-billion dollar personal fortune, a subject of endless fascination for journalists. Most recently, Nemtsov and Leonid Martynyuk produced a large study of waste and graft that has become the 2014 Sochi Winter Olympics. My colleague Olga Khvostunova and I had a chance to interview Nemtsov about his report, " Winter Olympics in the Sub-Tropics: Corruption and Abuse in Sochi ." (An English-language version of the report was put out last week by The Interpreter, an online translation journal I edit under the auspices of the Institute of Modern Russia. Both the report and the following interview were translated by Catherine A. Fitzpatrick.)

"Putin believes that the Winter Games are his personal project and his personal triumph. It doesn't matter what funds are spent; he wants to demonstrate his power to the whole world."

You published a large report about the preparations of the Olympics in Sochi, but despite the active discussion of the amounts spent, the question remains open: whose idea was it to hold the Winter Games in Sochi, of all places? That's the warmest climate, and the most popular summer resort, in Russia.

That's a rather interesting story. Back in early 2000, I happened to be at a certain meeting with Putin in Europe, which took place in a mountain ski resort. And [Vladimir] Potanin, who was also there, proposed building the same kind of modern resort in Russia -- for example, in Krasnaya Polyana. Putin himself loves skiing, and at the time he really liked the idea. To be honest, I was also happy with this idea because I myself was born in Sochi and I know this area. But the idea of putting together the Olympics deal in connection with Sochi was something somebody else told him later -- perhaps it was [Krasnodar Territory Governor Aleksandr] Tkachev or someone else. But Putin was really fired up with this idea.

You write in your report that so far, $50 billion has been spent on the Olympics, whereas originally, the application for Sochi had a figure of $12 billion. In your estimates, the expenditures have quadrupled because half of them went to corrupt pay-offs and kick-backs. But perhaps it's because from the outset, not all the climactic conditions were taken into account in the cost?

It's actually about another issue. Back at the stage of preparing the application and planning, it became clear that it would not be possible to build all the infrastructure in Krasnaya Polyana -- the gorge is too narrow, and therefore it was decided to bring everything down to the Imeret Lowlands. In fact, this is a huge swamp in which is located the flood lands of the Mzymta River. There is a well-known fact that even back in the times of Stalin, they tried to measure the bottom of this swamp. It turned out that even at a depth of 170 meters, there were still no firm layers. That is, to construct some sort of buildings on this soil is simply madness, they will all slide. That's the first point.

As for the appraisal of the costs, we saw how the expenditures in the Winter Olympics in other countries grew; everywhere the final total is approximately double the original stated sum. Let us suppose this is a universal principle, then the cost of the Olympics should be $24 billion [twice the originally cited amount of $12 billion], but in Russia it is $50 billion. That means it is logical to suppose that $26 billion are bribes and embezzlement. In order to confirm this supposition, we decided to calculate how much was spent on average per fan. That is a more objective indicator because stadiums are different everywhere, infrastructure as well, but expenses per fan are everywhere approximately at the same level. What happened in Russia? The average "price" per fan at an Olympics stadium throughout the world is $6,000, but at the Fisht Olympics Stadium in Sochi, it is $19,500 dollars, that is triple the cost!

So why wasn't there an investigation of the facts of corruption in Sochi? If that project is so important for Putin, and if he is waging war against corruption, even if in word only, a sensational exposure of corruptions at the Olympics construction site would fit well into his PR campaign.

It's all very simple. Putin is part of a mafia; they do not turn in their own. He gave his friends an opportunity "to earn some cash," and now he is forced to deal with things as they are. He tried to remove someone, but no matter where he turned, the interests of friends were always quickly discovered.

But there have been four directors of [Olympics company] Olimpstroy in the last few years; Putin cannot completely close his eyes to what is happening, can he?

Presented by

Michael Weiss and Olga Khvostunova

Michael Weiss is the editor in chief of The Interpreter, a digital publication sponsored by the Institute of Modern Russia. Olga Khvostunova is a Russian journalist, expert in political linguistics, and an analyst at the Institute of Modern Russia.

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