Russia faces Olympic-size cost overruns

Next year's games in Sochi may be the most expensive in history, with the tab expected to be 400% more than original projections.

By Jonathan Berr Feb 19, 2013 1:01PM
Buildings of the Olympic village are seen under construction in Rosa Khutor, just east of Sochi, Russia, on Feb. 6, 2013 (Ivan Sekretarev/AP Photo)Russia's Olympic dream has turned into a nightmare.

Next year's Winter Olympics in the Russian Black Sea resort of Sochi is shaping up to be the most expensive games in history amid reports of massive corruption in the awarding of construction contracts.

According to The Los Angeles Times, the games may cost three times as much as the next most expensive Winter Olympics, the 1998 games in Nagano, Japan, which had a price tag of $17.5 billion. The Summer Olympics in London last year cost about $13 billion, according to the U.K.'s Guardian.

Russian President Vladimir Putin, reportedly furious because costs for the Olympics are expected to be 400% over their original projections, has ordered the firing of a senior member of the Russian Olympic Committee.   His anger is understandable, given how the games are supposed to showcase Russia's achievements, not highlight its corruption and other serious problems. Transparency International ranks Russia No. 133 out of 176 on its latest Corruption Perceptions Index. On this scale, a higher rank indicates more corruption.  

As the BBC recently noted, Russia's Olympic organizers had their work cut out for them even under the best of circumstances because there wasn't much infrastructure in Sochi suitable for a huge international sporting event.

The ski jump alone has become a symbol of how big a boondoggle the games have become. According to The Associated Press, its costs have soared to $265 million from $40 million. Time magazine recently reported that workers building the Olympic facilities are being mistreated. Unlike other countries, which used public funds on the games, Russia is counting on private and state-controlled companies to foot more than half the bill, the AP says.

Sochi isn't the only place where dream of the Olympic games didn't match reality. As CNN noted, it took taxpayers in Montreal three decades to pay off the debt from the 1976 games. Cost overruns are a problem that organizers of many games have faced. 

Follow Jonathan Berr on Twitter @jdberr.

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Tags: Sports
77Comments
Feb 19, 2013 3:05PM
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Article states "there wasn't much infrastructure in Sochi suitable for a huge international sporting event. "
How did they get the Olympic bid in the first place? 
Feb 19, 2013 2:31PM
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Olympics are political...and if it's political...you can bet your sweet A$$ it is fraudulent and corrupt.
Feb 19, 2013 2:32PM
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Everyone here was devastated when we (Chicago) missed 2016. Probably would have bankrupted this city.
Feb 19, 2013 2:47PM
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In my opinion, the games are not a prestigious as they once were.
Feb 19, 2013 2:30PM
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People are convinced that large sporting events such as the Winter Olympics, Summer Olympics, Super Bowl, etc bring in a lot of money. The reality is: the cities are lucky if they break even....

Feb 19, 2013 2:44PM
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Good job writer, the Nagano Olympics were in 1998 not 1988
Feb 19, 2013 3:10PM
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Apparently, Putin has promised the Russian people that the cost of the Olympics Games in Sochi will not add a single kopek to their debt.
Feb 19, 2013 3:42PM
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hey its Russia its how they have always done business. and look at the leader who thinks a meteor   was a missile. some of the smartest people in the world are in Russia but are ruled buy the stupidest and greediest in the world.
Feb 19, 2013 4:18PM
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They're using the Beijing model:
Impress the world.
Bankrupt their own country.

Feb 19, 2013 3:44PM
Feb 19, 2013 3:29PM
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Looks like the Russians will be in far worse shape financially than Montreal ('76 Summer games) which is still paying off debts.  I guess Putin and his henchmen won't be hauling out some crooked culprits and shooting them....Stalin would have! 
Feb 19, 2013 3:30PM
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I see nations are still driven by the desire to "keep up with the Jones'", rather than by the KISS pronciple
Feb 19, 2013 3:57PM
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Not really surprised knowing that the duh doys running the Olympics got rid of the longstanding tradition of wrestling in favor of yawn-inducing elitist fest of golf.
Feb 19, 2013 3:47PM
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Ruussia broke trying to pay for Olympics and a jewelry hiest of 50 million dollars same day Hmmm wonder about that.
Feb 19, 2013 4:08PM
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How did this locale get the bid?  Look at former venues - Sarajevo's arenas are a mess to say the least.  Ditto with Beijing.  Talk about corruption and payola.  Once the Olympics are over, ashes to ashes, dust to dust.
Feb 19, 2013 3:54PM
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Most Russians will probably boycott the games due to no Wrestling.  Way to go IOC.
Feb 19, 2013 3:38PM
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And to think Chicago was a candidate for the 2016 Olympics.  Too bad it didn't work out for Chicago because then it could be considered the most broke City in the US, and not just one of the top cities with a high Debt Service Expenditure Ratio, but then I still have hope that it will achieve the top rating for any Debt Level.
Feb 19, 2013 2:25PM
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I'm betting that each Olympic year, the cost is higher than the Olympic year before.
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