Other website sections

»Sports Jobs

»Tenders

»Directory

»Conferences

Russia has slashed its building budget for the 2014 Sochi Winter Olympics to 218 billion roubles ($6.10 billion), but is confident it can deliver venues two years ahead of time, the minister overseeing the project said on Tuesday.

The state will fund 108 billion roubles of the project in the new budget, and the private sector will pay the remainder after a 15 percent cut to its initial cost estimates, Russian Deputy Prime Minister Dmitry Kozak told Reuters in an interview.

"Obviously this figure is subject to adjustments, depending on the situation on the construction materials market. It can be revised either upwards or downwards," said Kozak at the MIPIM property trade fair, speaking through a translator.

These funds will cover the cost of the Olympic facilities and infrastructure supporting their operations, he said, adding that Russia's national reserves of 4 trillion roubles will be adequate to offset any future cost increases.

Russia had earlier pledged to spend $12 billion on developing Sochi, a resort on its Black Sea coast, of which $7 billion would be public funds and the rest from private sources.

Winning the right to host the Olympics -- the first in Russia since the boycott-hit 1980 Moscow Games -- was presented by the Kremlin as international recognition of the country's resurgence, but the global downturn has raised concerns about the country's ability to deliver the games on time.

"The construction schedule has been defined and we believe it is a quite feasible and realistic one," said Kozak, a former minister for regional development promoted by President Dmitry Medvedev last October to oversee the games.

He said construction for all the Olympic facilities will start by the end of this year, in order to complete the venues for event testing, two years ahead of the games.

STATE AID

Russian real estate developers and construction firms are among the most heavily leveraged in the economy and have been among those hit hardest by the credit crisis, which has choked off their ability to finance large projects.

Kozak, who has travelled to Cannes to seek foreign investors for 11 Olympic investment projects worth a total of $3 billion -- acknowledged that attracting private sector participation is growing harder.

"But all the (Russian) investors who took the liability to build projects before the crisis, no one has pulled out. They are still sticking to it," he said.

Some of these firms have requested aid, and the government has extended state loans to four developers of infrastructure and sport facilities, as these "do not offer very high econ returns and take a long time to pay back," Kozak said.

(Source: Reuters)