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16 Oct, 2008 09:26

Sochi Olympic preparations await brunt of funding crisis

Russia’s biggest investment project, the 2014 Sochi Olympics, isn't yet facing a lack of funding despite the current financial crisis according to the Olympic construction coordinator in Sochi.

Deputy Prime minister Dmitry Kozak, appointed this week to oversee preparations for the 2014 Winter Olympics,  says  the world financial crisis  may hit  developers building the Olympic facilities in Sochi and  thus affect the preparation for the games.

The government,  through coordinator Olympstroy, has already found investors for the majority of the Sochi facilities.  But a lack of liquidity may force  them to abandon the project.  Viktor Kologyazhny, the head of Olympstroy says so far there are no alarming bells from investors.

“Right now we don’t have problems with the schedule of the construction and its quality. Those who decided to invest in Sochi are working normally and construction goes on.”

Meanwhile Oleg Deripaska’s Basic Element, which is one of the Olympic facilities contractors, has frozen several other large projects due to the crisis.  And foreign subcontractors are warning it will be hard to complete the work on schedule if there are funding problems according to Tanja Haas-Lensing, Board Member of Haas Construction Group.

“We are not investors we are contractors we always depend on funding  If there is a lack of money it’s hard to do a good job.”

London, which will host the summer Olympics in four years, has warned that the credit crunch could result in a 250 million pound shortfall in the public-private sector project.  And the Australian developer building London's Olympic Village is struggling to find funding for the $1.7 billion project after credit markets froze worldwide.

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