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18 Jan, 2008 07:52

Korean investors boycott Sochi Olympics

Russia's Krasnodar Region has begun its biggest ever investment drive in Berlin. It is courting foreign investors to build infrastructure for the Winter Olympics in 2014.

But in exclusive footage captured by RT, the event was plunged into controversy after a major Korean building firm refused to provide materials to the Games, just seconds before the signing ceremony.

Everything was going so well as Sochi’s Krasnodar Region sold itself to a packed-out crowd of foreign investors.

Europe’s biggest insurer, Allianz Group, pledged to provide coverage to the industries investing in Olympic infrastructure.

France’s Saint-Gobain agreed to build a new factory making 200,000 tonnes of glass a year.

Then it was the turn of the Koreans. They were due to sign up to a new brick and building materials plant in the Krylovsky district. What happened next made those present uncomfortable.

“We do not think Russia has the demand to support our factory,” stated representative of the Korean company.

“We’ll need a billion bricks a year by 2010, that’s 400 million more than we produce now!” exclaimed in surprise deputy governor of Krasnodar region Aleksandr Remeskov.

“A local factory told us most bricks produced in the region are low quality,” accused Korean manager.

“Of course he will tell you that, you’ll be his competitor so he does not want you to set up here!” Mr Remeskov swept aside the accusation.

“Did you say you need 400 million? We thought you said 4 million. Anyway, we make 10 billion bricks in South Korea,” boasted the Korean.

“It’s true we cannot make that much. First of all, get yourself a proper translator, then we can talk. You’ve wasted so much of our time,” Aleksandr Remeskov concluded.

The deputy governor put a brave face on developments.

“Some problems have come up about the Olympics. Yesterday in Sochi, Olympic builders Olimpstroy made a series of controversial statements which disturbed us. The urgency of solving the problems meant our governor had to go to Moscow.

It’s always hard at the start of the Olympic building programme. When the projects have been worked out and the subcontractors are in place, things should smooth themselves out,” promised Mr Remeskov.

The farce shines a harsh light on the reality of the hype surrounding Sochi. Even in the fastest-developing construction region in Russia, investors who had flown to Berlin’s Trade Commission like the Koreans were only prepared to stump up € 17 million for the plant, and even they backed out of even that.

The region remains an area of world-class potential, with outstanding climate, soil and soon to be an Olympic host, but the goings-on in Germany reveal that for the moment it’s mostly just that – potential.