Sochi is built on a narrow, subtropical strip of lush beachfront wedged between the towering Caucasus mountains and the Black Sea. Yet for all its natural advantages, the city is hobbled by transportation bottlenecks. One narrow mountain road and a single-track railroad are all that connects Sochi to the rest of Russia. The city's only thoroughfare, Kurortny Prospekt, is often paralyzed with traffic jams. Moreover, the city's antiquated seaport cannot receive oceangoing ships. In a recent speech, Mr. Putin complained that Sochi's sewage system needs rebuilding.
"The infrastructural challenges facing us are immense, we know that," says Alexei Malkov, head of the city government's information department.
But one of the political storms the Kremlin is trying to weather as it transforms underdeveloped Sochi into a world-class venue is an outcry by ecologists over rapid development in the formerly pristine mountain region.
A decision taken last week by Putin to move several Olympic installations may force some developers to go back to the drawing boards. "In determining our priorities – money or the environment – we chose the environment," Putin told a meeting of the International Olympic Committee (IOC) in Sochi last week.
Among the sites that will need to be moved, he said, are a bobsled run that cuts close to a UNESCO-protected nature reserve, an athlete village, a road, and a water-extraction plant. Local environmentalists say they're pleased with Putin's choice, but add that more installations need to be moved further from the fragile Grushevy Ridge. "We hope the government will move all the Olympic [infrastructure] from that area, or these concessions will be just half measures," says Dmitri Kaptsov, spokesman for the Caucasus Ecological Wave, an environmental group.