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Russian President Dmitry Medvedev on Monday brushed aside concerns that a deepening economic crisis could scupper billions of dollars in state funding for the country's 2014 Winter Olympics.

Russia has pledged to spend as much as $12 billion in private and public money on developing the Black Sea resort of Sochi where the Games will be held.

But cash is becoming increasingly hard to find as the Russian economy contracts for the first time in a decade and companies slash spending.

"Despite the crisis, we will have to finance those volumes which were planned," Medvedev told a meeting of officials, who were called to discuss preparations for the Games. "These clauses in the budget are secure (from cuts)."

Hosting the Games has been presented by the Kremlin as a symbol of national pride and an indication of Russia's revival under former President Vladimir Putin.

Russia now faces the headache of building dozens of venues and bringing the region's crumbling infrastructure up to date by building roads, airports and sewage plants.

The Kremlin said in a statement it was even considering using student brigades to help finish off building work, harking back to Soviet times when the authorities used special student crews for cheap labor.

FINDING INVESTORS

Russian officials refuse to give exact spending estimates for the Games but the original 2007 bid for the Games mentioned a $12 billion figure for developing the entire region.

Deputy Prime Minister Dmitry Kozak, who is in charge of preparations, told Reuters this month that Russia would spend $6.1 billion on direct preparations for the Olympic Games.

Medvedev said the Sochi region was in need of new electricity generation capacity, but added that private investors were not rushing to spend money.

"There are problems with finding investors," he said.

Medvedev also complained that Russia's legendary bureaucracy was slowing preparations.

"A lot of things which need to be done rapidly are being ensnared in bureaucracy," he said. "Normal work has still not been established."

The Kremlin chief also told officials to speed up work on setting aside land for Olympic buildings.

Prime Minister Vladimir Putin said the winner of Sochi mayoral elections, which are due on April 26, would have to build relations between Moscow and local officials.

Boris Nemtsov, a former deputy prime minister who is running in the election, said he had been sprayed in the face with ammonia by pro-government supporters after writing an open letter to Medvedev to complain about the Olympics.

He said in the letter the cost of preparing the region for the Olympics would balloon and that it was likely Russia would not be able to prepare Sochi in time for the games.

"Holding the Olympic winter games in a seaside resort with a subtropical climate surrounded by mountains where infrastructure has not been modernized since Soviet times looks less than adequate," he said in the letter which was published on Monday.

(Source: Reuters)