Sochi 2014: Most Expensive Olympics Ever

Sochi Olympic Games 2014 | BCBusiness

Chasing the priciest Games in history

On February 7th the Olympic torch will enter the sparkling new Fisht Olympic Stadium, completing its record-setting 65,000-kilometre trip and kicking off the Sochi 2014 Winter Olympics. If temperatures in the sub-tropical south Russian city permit, officials might even open the clamshell dome, giving some of the 40,000 spectators views of the Black Sea. For British Columbians who still picture Wayne Gretzky winding through the rainy streets of Vancouver in the back of a Chevy pickup, the contrast will be stark. These games are going to be different.

Almost everything about President Vladimir Putin’s grand spectacle will be new—both literally, in the sense that many of the venues will have been completed only weeks (or, if some of the more panicky recent stories are to be believed, days) in advance, and in the sense that much of the Sochi experiment is being managed in a way that’s new even to Olympic veterans. From the 206 construction projects undertaken, to the 450,000 cubic metres of snow stockpiled in case of warm weather, these Games are more ambitious and more complex than any before. But one thing that the 2010 and 2014 Games have in common is the international tribe of sport professionals whose specialized skills power the Olympic machine. Whether it’s figuring out how to accommodate a live, global television broadcast on a slopestyle course or learning how to say “no flags on the podium” in a half-dozen languages, the Olympics provide work experience you can’t get anywhere else. The Vancouver 2010 Games gave hundreds of British Columbians the opportunity to develop these rare skills, and some of them have since joined the tribe, following the Olympic movement around the world like the torch itself.

Erin Porter was working in communications for Accenture in Vancouver before she spotted a position on the VANOC jobs site for an executive assistant to the VP of Sport. She had to take a pay cut, but as a former athlete, she’d always dreamt of working on the Games. With a year to go before the Vancouver Games, she was promoted to a new role, managing the medal ceremonies. She handled everything from getting the bouquets and medals to the right place at the right time to stage-managing ebullient athletes and ensuring they followed the IOC’s rules for appropriate podium behaviour. She was good at it and was asked to do the same job in London in 2012. There the athletes were far less compliant, Porter recalls. Swimmer Ryan Lochte, for one, decided to show up with an American flag “grill” on his teeth in direct contravention of the strict IOC policy. “I had to stop him from wearing it,” she says. “Athletes are always trying to hide flags.” It’s the kind of insight that only comes with experience. She’s going to be doing the same job in Sochi.

Even for the most experienced, though, it’s been clear that 2014 was going to be a different kind of challenge from the start. On July 1, 2007, a seven-storey-tall Russian Antonov An-124 (one of the largest heavy airlift planes in the world) landed in Guatemala City carrying 200 metric tons of ice and all the equipment necessary to build a 224-square-metre ice skating rink across from the hotel where the International Olympic Committee was about to decide on the 2014 host city. Russian Olympic men’s figure skating champion Yevgeny Plushenko starred in an ice dance performance of Sleeping Beauty. Three days later Putin closed the deal with a speech in English that ranged from promises about traffic to an anecdote about a boulder in the region believed by the ancient Greeks to be the site of Prometheus’s torture at the hand of Zeus. Grandiosity was always part of the plan.

Every Olympic Games is an elaborate production, and every host aspires to out-do the last, but the free-flowing taps of money poured into Sochi offer some perspective. At an estimated $50 billion, the Sochi Games are the most expensive ever, exceeding Beijing ($43 billion) handily and quintupling the most ever spent on a Winter Games—Vancouver, at $9.2 billion.

Sochi’s price tag not only signals the event’s scale and complexity, but also hints at another difference between the 2010 and 2014 Games. Given that the budget Putin originally announced in 2007 was $12 billion, an overrun that big can only be explained when the cost of corruption is factored in. Russian opposition leaders estimate that, for every dollar that is spent actually building things, three disappear. And even then it’s hard to understand how a road (Sochi’s equivalent of the Sea-to-Sky Highway) can cost more than $150 million per kilometre. That is, until you learn, for instance, that construction contracts worth $7.4 billion have been awarded to companies owned by Arkady Rotenberg, Putin’s boyhood friend and former judo partner. Transparency International’s 2012 Corruption Perceptions Index ranks Russia 133rd, globally, which means business is significantly more honest in Sierra Leone. Canada, by comparison, is tied for ninth with the Netherlands, trailing Norway and Austria. Incidentally, the Austrian city of Salzburg was perceived to be the front-runner in Guatemala before Russia’s performance stole the show.

Corruption and construction often go hand-in-hand, and in Sochi, almost everything had to be built from scratch. The ski jump, for instance, is one of many venues where the intersection of lengthy delays, cost overruns and private interests raises suspicion. Last February, Putin fired an official named Akmet Bilalov after touring the facilities and discovering that the jump was two years late and costs had ballooned from $40 million to $265 million. Bilalov had sold his stake in the company that was building the facility a year earlier to state-owned Sberbank.

Whistler native John Heilig has been riding shotgun in the Russian business world for more than two years. The International Ski Federation’s technical delegate for Nordic Combined (which means he’s responsible for ensuring the fairness and safety of the two venues, the ski jump and cross-country course) says he’s gotten used to disorganization and communication problems with the Slovenian contractor that’s been working on the site. “You know, there’s a game we get to play called ‘Who is the boss?’ I play that game with those guys a lot,” he says.

The official explanation for the ski jump fiasco isn’t much better than the suspected one, says Heilig. The geotechnical analysis hadn’t been done properly and the till slope on which the jump is built was found to be more unstable than expected after construction had begun. The additional drilling required to secure the foundation was partially responsible for the delays and cost overruns. Heilig has faith that the job has now been done right, but confidence in the venue is still not what it ought to be so close to the start of competition. “The stability, I can’t imagine it’s fantastic,” he says. “But they have drilled way down there to anchor the thing, so I hope it works!”

Image: Brian Finestone
2010 veteran Steve Petrie learned the hard
way that the show must go on, with or
without snow.

Heilig has one advantage Steve Petrie lacks: construction on his facility started years in advance. Petrie, owner of Pemberton’s Arena Snowparks, is a halfpipe sculptor. He and his team built the Cypress Mountain pipe in which Shaun White landed a mind-boggling acrobatic double McTwist 1260 to cap his 2010 gold-medal-winning performance. The trouble with halfpipes is that they’re made out of snow. Petrie says the 2010 event was at one point in doubt due to the weather: “When I arrived at the venue on Cypress I wasn’t even sure we’d be able to pull it off—it was that bleak.” The solution was a Sikorski Sky Crane helicopter that flew a big bucket over to nearby Black Mountain where excavators filled it with snow to be brought back to the venue. He had the same concern ahead of this year’s Games, but, he says, “the thing about the Olympics is that the show must go on. So it’s kind of unique in that way. You get all the resources you need to get the job done.”

Another challenge for the B.C. Olympic vets working in Sochi is that the Games aren’t the Russians’ only priority. In Krasnaya Polyana, which is to Sochi as Whistler was to Vancouver, the Games are driving investment in a new resort complex. All the development complicates the process of getting ready for competition because there are stakeholders involved who are more concerned with what happens after the IOC leaves town. For Nordic combined, Heilig needs to prepare both the RusSki Gorki Jumping Center and the attached cross-country skiing course, but the two pieces of property are owned by different investors. “They abut each other and they need to work together,” he explains, “but they won’t.” Petty disputes like these happen when the Games venues are on land controlled by dozens of different real estate speculators.

And the investors aren’t the only stakeholders who can be tough to work with. Len Apedaile, the technical delegate for the Paralympic Nordic events has been getting increasingly frustrated dealing with the Russian government. “There were things that even the [organizing committee] didn’t know were happening at the venue and that they didn’t have control of,” he says. On one trip to Sochi in 2012, Apedaile recalls with a laugh, he was checking out the Paralympic cross-country course he had helped plan on a previous trip. To his surprise, part of the course intended to accommodate athletes using sit skis had been cut off by a construction project: a new chairlift leading to a sprawling nearby complex hidden behind 15-foot walls. Apedaile was told it was to be President Putin’s private lift. “There’s always some higher-level interest or priority,” he says.

Like all the Canadians who cut their teeth in 2010, Apedaile can rattle off a long list of ways in which the Sochi experience is nothing like working in B.C. But from his perspective, confronting new challenges under pressure is a defining feature of any Olympic work. When VANOC named him sport manager for cross-country skiing in April of 2009, he had been president of the Strathcona Nordic Ski Club in the Comox Valley, and had been volunteering for 2010 prior to his appointment. When he got the nod, he says, it was like going from local high-school football to the Superbowl.

Everyone who has ever worked on the Olympic Games will say it’s unlike any other experience. The scale, the complexity, the pace, the intensity and the stakes are all higher than at any other event. And Russia is a challenging place for Canadians to work under any circumstances—just knowing who to bribe and how much is tough when you have to overcome a language barrier. The 2010 Games were a crucible that gave some British Columbians a taste for the thrill of working without a net. In Sochi, with five times as much money being spent, five times as many people involved and the world anxious to see if Putin’s grand gamble will pay off, it’s a longer way down if anyone stumbles.