Russia Is Spending A Ludicrous Amount Of Money On The Winter Olympics
A few days ago, Deputy Prime Minister Dmitry Kozak estimated that the Sochi Winter Olympic Games would cost $51 billion.
That's a lot of money — as the AP notes, it's way more than the $6 billion Vancouver spend on the last Winter Games in 2010.
In fact, according to some calculations tweeted today by the Times of London, it's the most expensive Olympic Games on record.
We put the Times' calculations into a chart to show the vast differences in money being reportedly spent (click to enlarge):
While it's worth noting that there are always some discrepancies in how Olympic costs are calculated (perhaps why the Times' number doesn't quite fit with the AP's), it certainly puts the numbers in context — Russia's Olympic spend is more than twice as much as the next most expensive Winter Games, held in Nagano in 1998.
What's behind this massive budget? Well, Russia is clearly banking a lot on these games, and hoping that they can dispell the persistent talk of corruption and inefficiency that lingers around the country (also notice the millions the government is paying Goldman Sachs to boost its image this year).
Unfortunately "corruption" and "inefficiency" could also be a reasons the spend is so big.
For example, the assassination of Moscow mobster Aslan Usoyan appears to have revealed how embedded Russia's organized crime groups are in the construction in Sochi — there's even talk of a "turf war".
This week Vladimir Putin spent a much-publicized trip to the site scolding officials over a two-year delay, and has demanded that Akmet Bilalov, a senior Russian Olympic Committee member, be fired for a particularly bad cost overrun on a ski jump.
There's even rumors that a Sochi's relatively warm climate is forcing Russia to hoard snow for next year.
So, right now, Sochi may not be the best investment for Russia. But Putin should take heart in the 2012 London Summer Games, which — despite widespread rumors it would be a disaster — are generally seen as having been a net positive for the UK.
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