Global Economics

Russia's Big Plans for 2014 Sochi Olympics


The Winter Games have the same symbolism for Russia as the Summer Olympics in Beijing did for China, but so far things are a bit of a mess

At 10 a.m. in the Caucasus Mountains, backhoes dig their way through the snow and trucks dump loads of sand. The sun is a yellowy white and it's -4 degrees Celsius (25 degrees Fahrenheit). Russian men with cigarettes dangling from the corners of their mouths reach for their helmets, shovels and wheelbarrows, then begin to hammer, weld and saw.

There are 500 people working here at an elevation of 563 meters (1,847 feet) at the foot of the Aibga mountain range. Two helicopters, a white Ka-27 and a red Mi-8, rise into the air overhead. One flying hour per helicopter costs €3,800 ($4,830), and each can carry four tons of cargo. Right now they're flying cement bags and steel pylons up to the north slope of Black Pyramid mountain, where all alpine ski events will be held during the Olympic Games in February, 2014.

The men's downhill events will start at 1,945 meters. The course is just under four kilometers (2.5 miles) long, ending at an elevation of 940 meters (3,084 feet). Alexander Belokobylski can't stop singing its praises. "It will be such a slope," he exclaims, "so challenging, so beautiful, there's never been one like it."

Belokobylski, a robust man with short gray hair wearing jeans and a thick wool sweater, is the foreman here. He's standing in an overheated office container, his right hand circling a 1:400 scale model of the Rosa Khutor sport center. "It won't just be the Winter Games," he says, "it will be a winter fairytale. We have the best snow in the world here, and we'll build the best facilities to go with it."

Meanwhile in Adler, 20 kilometers southeast of Sochi on the Black Sea, Svetlana Berestyeneva sits in her kitchen and brews coffee. When she heard that Sochi would be hosting the Olympic Games, her first thought was that her house—built by German prisoners of war in 1947—might finally get a sewage system, warm water and a gas line.

Instead, "I get nothing," says Berestyeneva. "I should disappear." Her house is in the way, and it is slated to be demolished to make room for the Olympic stadium and a park with five halls for ice hockey, figure skating and curling. There are 1,500 people who are supposed to move—families are being evicted from their homes and forcibly resettled. "I'm not going," Berestyeneva says. "If they want my land, they'll have to shoot me."

At a restaurant in the old boat club in Sochi, Dmitry Kapzow bangs his hand against the table so hard he sloshes tea out of his glass. Kapzow is a forestry student who also works for the Environmental Watch on the North Caucasus. He's an angry 22-year-old man. "The Games are an ecological disaster," he says. "Twenty-thousand hectares (50,000 acres) of forest will be cut down, a unique landscape will be destroyed, and bears and mountain goats will be driven out."

Kapzow complained by letter to Jacques Rogge, president of the International Olympic Committee (IOC). "The reply was laughable, a form letter," Kapzow says. Together with the World Wide Fund For Nature and Greenpeace, he filed a lawsuit against the Olympic construction projects. At first they won, but then a district court scrapped the decision. They did manage to achieve a ruling that the bobsled run must be relocated, but for Kapzow that's not enough. "I'm not giving up," he says.

Russia may be an old empire, but it's also a new country—one that has only had something close to democracy for the past 15 years. It's also a country that wants to show just how gloriously it has arrived in the 21st century. Vladimir Putin himself campaigned for Sochi in front of the Internationally Olympic Committee in 2007, giving speeches in English and French. Russia's current prime minister, then still its president, promised to invest €9 billion, more than any other contender for the Winter Games. They are, to a certain extent, his Games.

The Winter Games in Sochi have the same significance for Russia as the Summer Games in Beijing did for China. And in this case too, even five years before the Games start, the question is already surfacing: Was it a good idea to award the Games to Sochi?

Resettlement and environmental protection were the same issues that sparked discussions over whether China should have been allowed to host the Olympics. It's already clear that Sochi will be a thorn in the eye of the IOC for the next five years. The protests and concerns won't stop. Be it a discussion of murdered journalists in Moscow, the war against Georgia or the struggles over natural gas, each time there are loudly voiced doubts about whether Russia is really ready.

Sochi lies directly in a crisis region, not far from Abkhazia, South Ossetia and Chechnya. In the past year there were six bomb attacks in the city, and four people died. Who were the perpetrators? Terrorists? Was it Georgian sabotage? Or radical local opponents to the Olympics?

Meanwhile, construction costs are rising and the oligarchs who are supposed to build the arenas for the Games are running out of money in the financial crisis. The government is financing the most essential infrastructure, but the current plans are less ambitious than earlier ones. The planned new train line from Sochi up into the mountains will have one track instead of two, and the highway will have three lanes instead of four.

The seriousness of the situation became clear in October, when Russian President Dmitry Medvedev appointed Dmitry Kozak, former governor-general of Russia's Southern Federal District and known as an experienced crisis manager, as minister for the Olympic Games. Kozak sent demonstrative New Year's greetings to the president via a video blog from the mountains near Sochi, stating that Russia's well-being depends on the success of the Games.

Meanwhile, anyone wanting to get an overview of the location or to visit the construction sites where the competitions are intended to take place, or even to find them at all, needs a skillful driver. Yefim Bityenev, who heads the organizational committee's office in Sochi, is one of them. He starts up his all-terrain vehicle and drives through a narrow, overburdened strip of land.

Sochi, a coastal city with 335,000 inhabitants, is located at the same latitude as Nice, France. It has a subtropical climate with 300 days of sun a year, and the coldest month is January, with an average temperature of 6 degrees Celsius (43 degrees Fahrenheit). Palm, cypress and banana trees all grow in Sochi. Under Stalin the city became a health resort for workers, and enormous sanatoriums still stand amid the magnolia groves. The city center, with a yacht harbor and a theater, is well-kept. But away from the center there are stray dogs, chimneys belching smoke, rattling old Lada automobiles, soldiers perched on pick-up trucks, burning garbage heaps and warped huts that cling to the slopes that rise steeply outside of the city.

It takes an hour to drive from Sochi up to Krasnaya Polyana in the Caucasus Mountains. There is skiing here from December to the middle of May, with the humid air that rises from the coast and cools in the mountains falling as powder snow.

The narrow road up the mountain follows the Mzymta River and passes through five tunnels. A forested hill appears on the right just before the entrance to the ski town. "There, look, that's where the two ski jumps will be," Bityenev says. At the moment, there's nothing to see but trees—spruces, chestnuts and beeches. Bityenev turns his car into the woods and stops in front of a clearing under deep snow. "This is where the bobsled run will be built," he says. A good imagination is in demand in Sochi these days.

The biathlon area, the hotel for journalists—they too exist only on paper so far. The Olympics in 2014 are still a while away, but time is already getting short. IOC coordinator Jean-Claude Killy, after his last visit to Sochi, said, "We can't afford to lose another day, another hour, even another second." The Winter Games here in southwest Russia, he said, will be "the most difficult task of all times."

Bityenev parks in front of Rosa Khutor, at the moment a massive construction site. In the site's office container, foreman Alexander Belokobylski shows off his sport center model, all yellow strings, red pins and blue blocks. The plans cover 537 hectares of land and will include a network of 14 ski lifts and 55 kilometers of slopes—eight of them Olympic, for downhill, slalom, Super G, snowboard and freestyle. Also in the plans are a four-star hotel with 600 rooms and three stadiums, for 14,000, 15,000 und 18,000 spectators.

So far, only five of the ski lifts and 30 kilometers of slopes are under construction. "It's going to be hard to get everything done on time," Belokobylski says. "We need to put on the pressure, then we'll make it." He pulls on his jacket.

Leaving the office container, Belokobylski tramps his way through the snow to point out the ski lift's lower terminal. Then he indicates the restaurant, hardly more than a skeleton at this point, although the ovens and dishwashers are already unpacked and waiting in a corner. "The Kremlin has the same kitchen equipment," he says.

In the future, 9,600 visitors a day are expected in Rosa Khutor—Sochi wants to start drawing tourists 12 months out of the year, using the Olympic Games as a springboard. In winter they can hit the slopes in the mountains during the afternoon, then in the evening stroll among the kiwi plants along the coast—that's the plan. Sochi's slogan is "Gateway to the Future."

To achieve this, the government and the oligarchs have made a deal. It follows the formula that if you want to build a hotel in the mountains, if you want to profit from the Games, then you have to build facilities for the Olympics as well.

A project like Rosa Khutor has its price, and that price has already doubled. As of November 2008 it had already reached €1 billion. The man who's supposed to pay that is Vladimir Potanin, principal shareholder of the world's largest nickel producer. Potanin is still one of Russia's wealthiest businessmen, but lately even he is having trouble getting credit.

Russian natural gas extractor Gazprom has already opened its hotel—a five-star one, of course—but the cross-country ski area the company is also supposed to construct is yet to be seen.

The Olympic Park on Imeritin Bay, down along the coast, is to be funded partially by Oleg Deripaska, a businessman who made his fortune primarily in aluminum. Right now wheeled loaders sit behind blue construction fences, waiting to be put into use. Most of the area is a swamp, with reeds growing meters high.

Dmitry Kapzow, the conservationist, stands atop a stone mound and points to a flock of birds. "This bay is one of the most important resting places for migratory birds," he explains. "There are 200 species here, and a quarter of them are endangered. It doesn't bear thinking about, what will happen if stadiums are built here."

He indicates the beach, and a concrete wall standing in the sand. This is where one of two freight harbors is supposed to be built, to bring in construction materials. "There's no building permit for it and no environmental experts were consulted," Kapzow says. "It makes me furious."

The same fury has Svetlana Berestyeneva in its grip. The house she's supposed to leave is located on the grounds of a former collective farm called Rossiya, which provided tomatoes and cucumbers for half of Russia in Soviet times, four or five harvests a year. There are laurel bushes, figs and tangerine trees in the yard.

Berestyeneva, an unemployed seamstress wearing sweatpants, sits in her kitchen and relates stories. For example that the previous mayor of Sochi told her at a meeting she shouldn't make such a fuss, since people in China were resettled as well, with no objections. Or that she and the others who are supposed to be resettled are being offered the equivalent of just €30 per sotka—100 square meters or 1080 square feet—for their land, although it's actually worth €64,000. And that they're being promised apartments in a high-rise building 15 kilometers (nine miles) inland. "What are we supposed to do there? Most of us make our living from renting rooms to tourists in the summer. We won't be able to do that anymore. And we're not going to find other jobs. Besides, we don't want to leave our ancestors' graves alone."

Berestyeneva founded a citizens' initiative that has written letters to Putin and Medvedev. They've never received an answer. "The government loathes us," she says.

When IOC representatives were in Sochi last April, according to residents along the bay, they weren't allowed to drive old cars and students were put into police uniforms, since at least they spoke a little English. Svetlana Berestyeneva and a group of 25 others wanted to put out posters at the cemetery reading "No to Olympic Games on our bones." A special police unit called OMON stepped in and stopped them.

When land surveyors, accompanied by marshals and 30 police officers, were on one of Berestyeneva's neighbors' property in July, the owner of the land reached for his telephone. His friends came, 150 of them, armed with clubs and gas cans. They kept watch for hours, the police sprayed pepper spray and the next day arrested three of the men. The owner of the house swears there will be a revolt when the bulldozers advance on his land. The property was a gift to his grandfather from Czar Nicholas II.

Berestyeneva says officials were supposed to confiscate her land on November 1. So far no one has come, but she expects them any day. She knows she can't win and that her hands are tied—a Russian law allows demonstrations to be considered terrorist acts. "I don't want to go to prison, in prison I can't fight for my land. What am I supposed to do?"

She's thinking of starting a hunger strike, but isn't sure if it would help. She looks out her window, toward the border with Abkhazia, only 10 kilometers away. Tbilisi is 440 kilometers.

"The most helpful thing would be a new, long war with Georgia," she says. "That sounds bad, but it's still better than Olympic Games in Sochi."


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