Russian Mega Projects
Published: May 23, 2014 (Issue # 1812)
Russia has a history of attempting to use vast infrastructure mega-projects to boost its economy. The
St. Petersburg Times looked at some past, present and future highlights of Russia’s propensity to dream big.
Winter Olympics, Sochi, 2014
Price tag: $51 billion
A matter of national pride and a great image booster, the Sochi Olympics were as smooth as could be sports-wise — but less so financially. Whistleblowers spoke of embezzlement reaching up to 50 percent of the Games’ budget, though officials denied such claims. Three months after the Games, neither businesses nor the state have much use for the Olympic venues, and local administration and hoteliers admitted the city will struggle to make full use of the infrastructure constructed for the event. Ironically, Russia’s public relations gains were almost immediately nullified by Russia’s meddling in Ukraine’s political crisis, while the newly annexed Crimean peninsula will now compete with Sochi for tourists and state support.
World Cup, 2018
Where: 12 Russian cities.
Price tag: $20 billion
The football fiesta is a step up from previous sporting mega-projects in Russia, which were concentrated around a single location. Twelve Russian cities will host World Cup matches in 2018. The building spree could do a lot for the transportation and hotel industries, but mega-projects have a tendency to exceed the initial price tag — Sochi was originally billed at $12 billion, implying that World Cup costs could spiral as high as $80 billion. Brazilians actually rioted recently against the high costs of hosting the 2014 World Cup, and it remains to be seen whether Russians would be more enthusiastic about the sport than football-mad Brazil.
Nuclear Power Plant
Where: Hanhikivi, Finland.
Completion date: 2024.
Price tag: $8.4 billion
The most expensive item on the list of seven mega-projects currently being considered for financing from Russia’s oil-revenue funded piggy-bank, the National Welfare Fund, the plan would see Russia’s state-run Rosatom corporation build a nuclear power plant in Finland, an energy-strapped nation that was the first in the world to commission a new nuclear plant after the Fukushima disaster in 2011. The payback period for Rosatom is estimated at about 20 years.