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Russian President Vladimir Putin takes a break during a friendly hockey match at The Bolshoy Ice Dome, the part of the complex of facilities operated by the International Ice Hockey Federation (IIHF) at the Black Sea resort of Sochi, southern Russia, Jan. 4, 2014. (Alexei Nikolsky/AP)
Russian President Vladimir Putin takes a break during a friendly hockey match at The Bolshoy Ice Dome, the part of the complex of facilities operated by the International Ice Hockey Federation (IIHF) at the Black Sea resort of Sochi, southern Russia, Jan. 4, 2014. (Alexei Nikolsky/AP)

In Sochi, anger and controversy of Olympic proportions Add to ...

Partially as a response to such threats, participants and spectators at the Sochi Games will be subjected to extreme surveillance, with all their e-mail and telephone communications monitored and stored by Russia’s Federal Security Bureau. A document signed by Russian Prime Minister Dmitry Medvedev – and obtained by The Globe and Mail – instructs communications companies to provide security services with “round-the-clock remote access” to the communications of all Sochi participants.

“This is a festival of corruption, a festival of human-rights violations, a festival of destroying the environment, a festival of destroying the only subtropical region in Russia,” Boris Nemtsov, a veteran opposition politician who was born in Sochi, said in an interview.

Earlier this year, Mr. Nemtsov co-wrote a report that called Sochi “an unprecedented thieves’ caper,” alleging that as much as $25-billion to $30-billion of Olympic funds had been embezzled. Mr. Nemtsov arrived at the figure by taking original estimates, and applying the highest rates of cost overruns at previous Olympics. (Before Sochi, the most expensive Olympics – winter or summer – were the $40-billion 2008 Summer Games in Beijing.) Everything above that, he assumed, was theft and bribes.

Part of the reason it has cost so much is that Sochi wasn’t a major sports destination when the IOC announced the 2014 Winter Olympics would be held here. The initial $12-billion budget for the Games was later expanded with an eye to making Sochi – and the newly created Rosa Khutor mountain resort – a sand and ski holiday destination that could compete long-term with the French and Italian mountain towns now favoured by affluent Russians.

The $50-billion-plus didn’t all come out of state coffers, at least not directly. Around town, various Olympic facilities are nicknamed after the entities or oligarchs that paid the bill: Locals refer to the Gazprom ski lift, the Sberbank ski jump, the Potanin slope. But Gazprom and Sberbank are Kremlin-controlled energy and banking interests, while mining magnate Vladimir Potanin is a Kremlin-friendly businessman who knows a politically smart investment when he sees one.

Mr. Putin’s first prime minister, Mikhail Kasyanov – now an opposition figure – has described footing the bill for an Olympic venue as “kind of a tax” that big business has to pay to stay on Mr. Putin’s good side.

Everything in Rosa Khutor is new. The Sanki Sliding Centre, which will host the bobsleigh, luge and skeleton competitions in February, was only finished in September, meaning foreign teams will never have raced on the circuit – except a few practice runs – before they race for gold.

“I don’t know what it cost, but it was a lot,” said Vyacheslav Shavlev, deputy director of the Sanki complex. “But it’s worth it because now we have a world-class track in Russia.”

Rosa Khutor’s town centre looks like it has been helicoptered in wholesale from the Alps, complete with interlocking-brick plazas, a huge McDonald’s restaurant and a host of five-star hotels (which were scrambling to get ready in time). Environmentalists complain that the creation of the resort – and the construction of two new highways and a high-speed rail line connecting it with Sochi – caused deforestation in parts of the 478,000-acre Sochi National Park. Construction debris can be seen along the banks of the Mzymta River that flows through the coastal and mountain Olympic sites.

Again, no one will say precisely what it all cost, or why. But they’re proud of it, especially after a thick blanket of snow fell in early December, calming worries that tropical Sochi – where average temperatures are the highest of anywhere in Russia – would host a snowless Winter Games.

“The most important thing is that everything is going well,” said decorated biathlete Alexey Kobelev, showing journalists around the state-of-the art biathlon complex during a November tour and shrugging off questions about costs. The biathlon centre was decorated with “Gazprom 2014” signs in honour of its sponsor.

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