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13 Mar, 2008 06:41

Russia banks on Cannes boost for Sochi

It may be a long way from the Black Sea, but Russia is hoping a Cannes meeting of investors will quicken Sochi’s development, ahead of the 2014 Olympics. The Black Sea resort city is being heavily promoted at the property market.

But Sochi has to overcome several challenges if it's to become a world-famous resort.

The Russian government insists it can build everything with a combination of state and private money. But the clock is ticking, especially for the construction industry which relies on long lead-times.

But Russia's Regional Development Minister Dmitry Kozak, strolling through the Russian exhibition at MIPIM is not worried. He says the government is right on schedule.

“Of the 216 projects engaged to Sochi’s preparation for the 2014 Olympics in Sochi, 59 will be given to investors,” Kozak said.

Experts predict the official price tag of $US 12 billion is unrealistic, and is likely to be much higher. But it's not just the rising costs that concern potential investors, including those at MIPIM.

Sergey Ryabokobylko of Cushman & Wakefield believes as a project, Sochi has its challenges.

But despite the challenges, Russia's private developers see Sochi as the land of opportunity.
Douglas Lund, the head of the construction unit at Oleg Deripaska's Basic Element, says the key is working in tandem with the government.

“It’s going to be a case working in conjunction with government authorities and other developers, so that we can bring Sochi together and make it work as a single complex. It’s very important to think that way” Lund said.