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Sochi cha-ching: Putin defends most expensive Olympics ever (+video)

London 2012 cost $19 billion. Beijing 2008 clocked in at $40 billion. But Sochi's price may be more than $50 billion, sporting the world's most expensive road, amid allegations of corruption.

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The inside view of the Adler-arena speed skating venue at the Russian Black Sea resort of Sochi, with just one year till the opening ceremony of the 2014 winter Olympics, is seen in this photo taken last week. Sochi, formerly a quiet Soviet-era Black Sea resort town, has been totally transformed.

Igor Yakunin/AP

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The Russian-hosted Sochi winter Games, now just one year off, are five times over budget and on track to be the most expensive Olympics in history. There’s an estimated $50 billion price tag before the opening event kicks off.

With less than three-quarters of the planned construction of stadiums, ski jumps, roads, railways, and other infrastructure completed, organizers have spent almost $37 billion already and expect to pay out about $14 billion more before the venue is ready, according to an official commission set up to oversee Olympic preparations

That will substantially exceed the price of the previous most expensive Olympics, the 2008 Beijing summer Games, which clocked in at about $40 billion. The 2012 London summer Games, which were heavily criticized for cost overruns, cost just $19 billion.

President Vladimir Putin, who went to great lengths to snag the right to host the Games in Russia, argues the money is well spent. In Sochi this week, Mr. Putin told journalists that the city will likely become a major future venue for international sporting contests such as Formula 1 racing, and big political events like the 2014 Group of Eight summit

"Everything here will be put to good use, at least this is certainly my big hope," Putin told visiting Formula 1 boss Bernard "Bernie" Ecclestone. 

"Right from the start, even before the construction work began, we already planned how we would use the facilities in the future," Putin added.

Sochi getting ready to host winter Olympics in 2014
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Public skepticism

But many Russians seem increasingly skeptical that the country, or even Sochi, will reap any lasting benefits from the undeniably prestigious Games, once the projected 3.5 billion viewing audience has switched off their TV sets and the athletes have left for home.

Some point to last September's $22 billion Asia-Pacific Economic Cooperation (APEC) summit, which is now mired in corruption allegations, as an example of Putin's penchant for extravagant showcases that grab the world's attention for a few days but drain the state treasury and leave little behind that can be adapted for the daily use of the population.

"All over the world, most people who like to ski have places to go. There are facilities for athletes, for amateurs, for cross-country skiers, all accessible and affordable. Only in Russia do we have almost nothing for average people, who have to go out into the countryside and make do for themselves," says Ivan Isayev, editor of Lyizhny (Ski) Sport, a popular Russian magazine.

"We're a country that has snow for five months a year. Why couldn't they invest that money into projects around the country that would be available to everyone?" he says.

"Such a lot of money has been invested into Krasnaya Polyana [the mountain hub for winter sports near Sochi], but I have my doubts about how useful it will be once the Games are over. Probably our professional athletes will reap some benefit, but the prices are already way too high for average people to even dream of using it," he adds.

Half to corruption?

Critics say that preparations for the Sochi Games are currently the biggest honey pot for corrupt officials and organized criminals, including alleged real estate swindles and inflated construction contracts

Even the choice of Olympic mascot became the subject of scandal two years ago, amid allegations that a nationwide electronic vote had been rigged 
to favor Putin's personal favorite, a snowboard-toting leopard.

"Any project in Russia has a corruption component," says Yuli Nisnevich, chief researcher at the Moscow office of the global anticorruption watchdog Transparency International.

"Usually it runs about 30 percent of the cost, but in the case of the Sochi Olympic Games we estimate it's much higher, probably around 50 percent," he says.

Sochi, formerly a quiet Soviet-era Black Sea resort town, has been totally transformed.  It now sports a modern airport, luxury hotels, a greatly boosted power grid, a new seaport, and dozens of other infrastructural improvements.

'World's most expensive road'

Several huge, ultra-modern Olympic installations are being built, including six sports arenas on Sochi's subtropical Black Sea coast  and five more in nearby Krasnaya Polyana, high in the Caucasus Mountains. Coastal and mountain venues will be connected by a high-speed railway link and what has been described as the "world's most expensive road," a 30-mile mountain highway that will cost an estimated $6 billion, or about $200 million per mile.

The Russian Olympic committee is pushing back against critics who charge most of these constructions are expensive white elephants that will fall into disuse once the Games are over, with articles arguing that all the new infrastructure will help Sochi become a world- class tourist destination in the future and pointing out that many of the Olympic facilities built for the Games will later be dismantled and rebuilt in other Russian cities.

"I fear that after the Games these objects, ultra-modern as they may be, will remain largely unused," says Eduard Sorokin, an expert with the independent Stadion sports news agency in Moscow.

"I doubt that the residents of Sochi [a subtropical zone] are going to take up an interest in winter sports. And the fact is that the presence of snow there is not completely reliable. They can spend millions on artificial snow to make sure the Olympics succeed, but are they likely to do that every year?," he says, adding, "The Sochi Games are going to be a short event that will no doubt pass with great fanfare. But it's basically a Kremlin whim that will do little to promote mass sports, which is what we really need in this country."

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