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[Zabougornov]

http://www.economist.com/news/europe/21581764-most-expensive-olympic-games-history-offer-rich-pickings-select-few-castles
Castles in the sand
The most expensive Olympic games in history offer rich pickings to a select few
Jul 13th 2013 | SOCHI |From the print edition

WITH seven months to go before the 2014 winter Olympics, Sochi is a gigantic construction site. Lorries run up and down dusty roads, excavators turn earth inside out, and 70,000 workers from every corner of the old Soviet Union dig, lift, pull and churn day and night. Imagining the finished venue is hard. “This is where bird lakes are supposed to be,” says Svetlana, a local activist, pointing to a pile of dirt.

The whole place resembles nothing so much as a Communist-era construction project. Cost, efficiency, nature and human lives never stood in the way of Soviet rulers who reversed Siberian rivers, built cities in permafrost and planted corn in virgin land—often to ruinous effect. In scale, Sochi 2014 is similar, yet the amount of public money it will cost makes Soviet projects pale in comparison.

In many ways Sochi is an odd choice for the winter games. It has a subtropical climate and is one of the very few places in Russia where snow is scarce. The opening and closing ceremonies will be held close to the Black Sea on swampy ground, once infested by malarial mosquitoes. Temperatures there rarely fall below zero. The lower slopes of the Caucasus Mountains are not guaranteed snow, so the organisers have stored last winter’s.

Sochi is also worryingly close to the north Caucasus, a predominantly Muslim part of Russia that has been immersed in a bloody civil conflict for two decades. Last year Russia lost 296 soldiers and civilians in the north Caucasus, according to Caucasian Knot, a monitoring organisation, almost as many soldiers as America lost in Afghanistan. “Imagine holding the games in Kabul,” one American official says.

Yet President Vladimir Putin sees Sochi 2014 as his own pet project: a sign of his power over people and nature, and of his international legitimacy. That Mr Putin spends a lot of time in Sochi adds a personal touch. Yet, as Boris Nemtsov, a former deputy prime minister and opposition leader who has written several reports on Sochi, argues, far from being a model of fair play, Sochi has emerged as a model of crony capitalism, lawlessness, inefficiency and disregard for nature and people. “The Sochi Olympics are an unprecedented thieves’ caper in which representatives of Putin’s government are mixed up along with the oligarchs close to the government,” Mr Nemtsov writes.

Olympic gold

Sochi has already set one record. At an estimated cost of $50 billion, these will be the most expensive games in history. When Russia placed its bid in 2007 it proposed to spend $12 billion, already more than any other country. Within a year the budget had been replaced by a seven-year plan to develop Sochi as a mountain resort. Most of the money is coming from the public purse or from state-owned banks.

Allison Stewart, of the SAID Business School at Oxford, says that Olympics tend to have cost overruns of about 180% on average. For Sochi the overrun is now 500%. But Russia made clear that money was not an issue, says Ms Stewart. She also notes that relations between the government and construction companies appear closer in Sochi than in other games. Large construction projects often have a side-effect of corruption. But in Russia corruption is not a side-effect: it is a product almost as important as the sporting event itself.

The quality of the work is patchy. The ski jump has been redone many times, and the cost has risen sevenfold. Newly laid sewage pipes have burst, so a nasty smell drifts over a kindergarten playground. Sea-coast fortifications cracked soon after installation. The work has been carried out with little concern for the environment. The river flowing into the Black Sea has been polluted by construction waste and protected forests have been cut down. A green whistle-blower was prosecuted and chased out of Russia.

The attitude towards workers is little better. Low-skilled migrants get $500 a month, working 12-hour shifts with no contracts, safety training or insurance. Even so, wages are not always paid in full, are often delayed and sometimes not paid at all, according to Human Rights Watch. Some employers withhold workers’ passports, so they cannot leave the site. Last year at least 25 people died in accidents and many more were injured. “Perhaps I would be more enthusiastic about the Olympic games if they treated me better,” comments one worker.

Most of the construction is overseen by Olympstroy, one of Russia’s state corporations. Alexander Sokolov, who wrote a doctoral thesis on these opaque bodies, argues that they are run under the informal influence of a rent-seeking group of people for whom the extraction of government funds is the main purpose. Many of Olympstroy’s employees appear to be selected on the basis of their relations with powerful officials and paid above market rates. Over the past six years Olympstroy has had four bosses. Changes at the top have been accompanied by criminal investigations, yet nobody has been brought to trial. Attempts by Communist deputies to bring Olympstroy under parliamentary control were blocked by United Russia, the ruling party. The Audit Chamber, a government watchdog, said the bosses of Olympstroy had created conditions for unjustified cost increases. Yet its own reports are marked as “classified information”.

One of the biggest private beneficiaries of Sochi is Arkady Rotenberg, a boyhood friend and former judo partner of Mr Putin, who got rich by selling pipes to Gazprom, another state company. According to Bloomberg, Mr Rotenberg’s companies have won contracts worth $7.4 billion, more than the budget of the 2010 Vancouver Olympics. Dmitry Peskov, Mr Putin’s spokesman, insists that “no friendship can grant you access to Olympics projects.”

A contract for the most expensive bit of the Olympics—a road connecting seaside venues with the mountains and costing nearly $9 billion—went to Russian Railways, the state rail monopoly headed by Vladimir Yakunin, a former KGB general and comrade of Mr Putin’s. Russian Railways also awarded a subcontract for the road to a private company, SK Most, with close links to Mr Yakunin. SK Most has a controlling stake in Millennium Bank, where the board of directors at one point included Mr Yakunin’s wife, and which supports his church activities. According to its website, the bank is now jointly owned by Russia Railways and its subcontractors, and is chaired by Mr Yakunin’s vice-president. Last year 25% of SK Most was bought by Gennady Timchenko, another of Mr Putin’s old acquaintances.

Russian Railways says the cost overruns were caused by the complexity of the road. It insists that the contracts were properly tendered. But Mr Nemtsov says the crucial early contracts were awarded without tenders. This week Russian Railways said Mr Nemtsov was not qualified to offer an opinion on the infrastructure project and called his report politically motivated.

The Sochi contractors have followed the example of BAM, the 4,300km (2,700-mile) railway across Siberia that cost the Soviet Union $14 billion and took 36 years to build. BAM was one of the projects that crippled the Soviet economy, as Yegor Gaidar, a former prime minister and architect of Russian reforms in the 1990s, wrote in an article published as long ago as 1988. He argued that the Soviet Union had wasted its money on construction projects whose main purpose was to “utilise” government funds. This was made possible only by a political culture which deprived people of any say and substituted the narrow corporatist interest for the country’s.

In 1988 Gaidar could not have imagined how a similar culture could come to be embedded in today’s builders of state capitalism in Russia. In its bid for the games, the Russian government said it provides “a stable political and economic environment in order to improve and enhance [the people’s] quality of life. The government is based on free and open elections, freedom of expression and a constitutionally guaranteed balance of power.”
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[Zabougornov]

http://www.washingtonpost.com/world/europe/olympic-building-besets-russias-sochi/2013/02/17/ec322476-76c3-11e2-95e4-6148e45d7adb_print.html
Olympic building besets Russia’s Sochi
By Kathy Lally, Published: February 18

SOCHI, Russia — The frenzy of construction for the Winter Games enveloping this city has local people feeling as if the Greek gods of old are flinging one Olympian thunderbolt after another at them as they helplessly endure.

President Vladimir Putin wants to turn Sochi, a threadbare resort on the Black Sea, into a polished Russian jewel, an up-to-the-minute, year-round snow-and-sun resort drawing tourists long after next year’s Olympics have moved on.

About 500 companies and 96,000 workers are laboring in this city of 345,000, Dmitri Kozak, the deputy prime minister overseeing the Olympic project, told reporters recently. Construction roars along 24 hours a day, leaving some residents dazed. Others are protesting. All are weary of the pounding of jackhammers and the clouds of dust.

Sochi is being transformed not only by stadiums and ski jumps but also by new roads, 22 tunnels, train stations, miles of railroad track, high-rise apartments, new sidewalks, construction of eight power plants and a new grid system to replace a now-precarious supply of electricity.

Bulldozers have torn the neighborhood of Mirny, near the giant Olympic media center, in half to make way for new buildings and highway interchanges. Many of the construction workers are migrants, especially from Central Asia, who get miserable wages and sometimes are not paid at all, according to a Human Rights Watch report issued this month.

And every day residents of the small settlement of Kudepsta gather near their backyard stream a few miles from the Olympic ice rinks, ready to block heavy equipment with their bodies in an effort to fend off construction of a thermal power plant they contend will poison them.

They began mobilizing in May against the plant on the Kudepsta River, setting up a 24-hour camp to block construction after workers began clearing a forested ridge about 500 yards from apartment buildings and a school. They have managed to stall the project, which was supposed to be completed by November of this year, because work began without the required permits and environmental studies. But they fear they will lose eventually.

“We have written to the president’s office and the governor,” said Tatyana Osipova, a Kudepsta resident, “and we’re not getting any answers.”

A ‘prison’

Vladimir Ivanov, a 63-year-old pensioner, said he spent 40 years working at the Norilsk Nickel plant above the Arctic Circle, surviving ferociously cold winters and health-threatening pollution. He used his life savings to buy a small piece of land and build a house in Kudepsta, close to the water and hillsides thick with greenery. All will be ruined by a power plant spreading pollution, he said. “I got out of one prison,” he said, “and entered another.”

Officials have assured residents that the plant will be built according to strict European standards, with filters preventing the dispersal of any pollutants. But most Russians do not trust their officials, and the people of Kudepsta insist that they are being misled, that officials act only in their own self-interest despite all the assertions to the contrary. Neither do they believe Sochi will become a tourist mecca. Turkey has lower prices and better service, they say.

“They want to make money selling electricity abroad,” contended Natalya Vorobyova, a young mother holding her 2-year-old daughter in her arms, “and they’ll leave us to die.”

They want the plant built elsewhere.

“We aren’t against the authorities or the Olympics,” Osipova said, “but we want things to be done properly.”

In its 67-page document on migrants, Human Rights Watch reported that the laborers — many from poverty-stricken Uzbekistan, Tajikistan and Kyrgyzstan — make $1.80 to $2.60 an hour on Olympic construction sites, earning about $455 to $605 a month. Sochi wages are low in general, but the average pay for construction workers here is about $850 a month. In Moscow the average is more than $1,300.

Interviews with 66 migrants produced consistent descriptions of 12-hour workdays, with only one day off in two weeks, Human Rights Watch said.

Semyon Simonov, coordinator of the Migration and Law organization in Sochi, said migrants are often hired without the registration, work permits and labor contracts required under Russian law. This leaves them vulnerable to abuse, he said. “Two days ago during a press conference, our mayor said there had only been two complaints made over working conditions,” Simonov said. “That’s because all the complaints are turned away.”

When Simonov and a lawyer try to intercede to get unpaid wages, they often encounter insurmountable problems. Various levels of subcontracting make it difficult to find the actual employer, and if a worker does not have a contract, regulators say they have no authority to intervene.

‘Nothing to lose’

To make way for the Games, about 1,500 families have been forced to leave their homes, according to Human Rights Watch. In some neighborhoods, such as Mirny, most houses have been torn down, but a few remain there, lonely islands surrounded by construction. Some have lost their houses without compensation, because titles, received during chaotic post-Soviet days, were not always clear.

Residents of the remaining 30 or so houses in Mirny — which means “peaceful” — feel trapped. They get home by traveling along roads deeply rutted by heavy equipment, dodging bulldozers along a landscape filled with mountains of dirt and gravel. A row of blooming mimosas reminds them of what used to be marshland, where they could hear frogs croaking instead of engines roaring. Now empty beer bottles, discarded by construction workers, sprout where flowers once grew.

“It’s hard to understand what’s going on,” said Alexander Dzhadze, who has lived in his modest little house for all of his 64 years. “They took the land from many people and never gave anything in return.”

The streets are still dark when children set off to school. Huge streetlights have been erected above to illuminate the new highway exchange that towers over them, but residents say the lamps will not be turned on until next year, for the Olympics.

Dzhadze said officials ordered him and his neighbors to paint their houses — sienna-hued roofs and cream-colored walls — to create a charming visual backdrop for the Olympics. With a pension of about $170 a month, he has no idea how he can afford it.

He is not afraid to speak up to a reporter.

“What do I have to fear?” he said, gesturing toward the dusty road, the high, massive wall supporting the highway about 12 feet from his yard and his tumbledown house. “I have nothing to lose.”

Neighbors are more cautious, and one man with a shock of white hair and full mustache planted himself in front of his car license plate, just in case it could somehow be used to identify him.

Electricity is sporadic — this day, Putin was in town and Mirny refrigerators roared to life for a time. Dzhadze fears that he may endure all this disruption, invest in painting his house, and then get pushed out for further development later. The nearby media center is meant to become a shopping and entertainment center after the Games are done, and who knows what the authorities have in mind for Mirny.

“It’s only going to get worse when the Olympics are over,” Dzhadze said, “because the journalists will be gone and anything can happen.”
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A la guerre comme a la guerre или вторая редакция Забугорнова

[Zabougornov]

http://www.foreignpolicy.com/articles/2013/04/11/russia_s_olympic_city?print=yes&hidecomments=yes&page=full
Russia's Olympic City
Russia is pushing ahead with its projects for the 2014 Winter Olympics. But not everyone is happy.
BY ANNA NEMTSOVA | APRIL 11, 2013

SOCHI, Russia — Six-year-old Kirill Dragan looked on silently as the wall grew. Just a few days earlier the spot where workers were stacking up cinderblocks on layers of mortar had been a roadway lined with the flowerbeds and grape trellises owned by Kirill's parents and 12 other families. But then the bulldozers and trucks moved in, submerging it all in dust and concrete. The boy watched as heavy machines dug holes, dumped mounds of gravel and sand, and unloaded more and more concrete blocks. The giant construction site for the 2014 Winter Olympics spreads all the way from the shores of the Black Sea to the snow-capped peaks of the Caucasus Mountains on the horizon.

"Help! SOS! They're walling off people alive in here," reads a red banner stretched across the roof of Kirill's apartment building on Acacia Street.

For months, this neighborhood of dilapidated houses has been trying to fight back the tide of construction and cynical threats from officialdom. If you were wondering why a topless, obscenity-yelling woman protestor saw the need to confront Russia's president about human rights violations during his trip to Germany earlier this week, all you have to do is come to Sochi.
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You'll find many people with reasons to yell at Putin here. The rising concrete wall (set to be 12 feet high upon completion) is about to cut off Acacia Street's view of the mountains -- and, indeed, of the rest of the world. During rainstorms, bulldozers push mud into residential courtyards, where the dirty water floods residents' basements, destroying floors and furniture. Mold is creeping up the walls in homes, filling the air with a rotten-garbage smell. Last month, Sochi City Hall filed a lawsuit against Acacia Street inhabitants who haven't been willing to demolish their own outhouses, kitchens, and water pumps that happen to be in the way of the construction of a new federal highway.

Russian authorities are resettling over 2,000 families who happened to live in the path of huge Olympic projects. But there are many others who have received zero compensation, and continue to wait in vain for new apartments from the state. The people whose lives have been turned upside down by Olympic development have been given no alternatives. They've never received a word of explanation from government officials about the rationale for destroying their homes. On Ternovaya Street in nearby Chereshnya, construction of Olympics-related power lines has triggered landslides, resulting in severe damage to homes, including collapsed walls and cracks in foundations. No one has ever apologized. People were expected to submit to this treatment without a squeak. "We're concerned that all of the authorities involved on both the local and federal level are not respecting the basic rights and human dignity of these families, including many small children," said Jane Buchanan, a Human Rights Watch representative who recently visited Sochi.

"We're stuck in a ghetto between two highways and a railroad without water, without fresh air, without a single patch of land for our kids to play on," Sochi resident Nadezhda Kurovskaya told me. "And then, on top of all that, they sue us, the poorest of the poor." Last week, Kurovskaya's grandson accidently fell up to his shoulders in a pond of liquid concrete. Luckily, neighbors pulled the child out before he sank -- though his rubber boots remained buried in the gray mush.

So what precisely is happening to Sochi, a place of palm trees and beaches that generations of Russians once viewed as the ultimate spot to get away from it all? Back in Soviet days, thousands of people escaped here from the dark Siberian winters and colorless industrial cities to see magnolias in bloom, listen to birds sing, relax on the beach, and recover their health and psychological well-being in Russia's only tropical resort. State-funded vacations typically lasted for weeks. And though not many local residents of Sochi had stable jobs, they were proud to hear visitors even from places like Moscow and St. Petersburg sigh and pronounce: "It's like paradise." (You might ask why a place with such a balmy climate was chosen precisely for the Winter Olympics. Russian officials respond by pointing to the nearby Caucasus Mountains, which boast considerable snowfall during the winters. If natural winter proves insufficient, the authorities have promised unspecified "innovative technical solutions" to make up the slack.)

As I visited Sochi this week -- a city where I, too, spent every summer of my childhood -- I found a city choked by traffic jams, dust, and construction. The seaside embankment of the once proud Soviet Riviera is now crowded by small shops selling low-quality goods. The lush gardens along the seashore have given way to monstrous, half-built skyscrapers.

For years I've been watching the demolition of old neighborhoods in Moscow and in my hometown of Nizhny Novgorod. But it's in Sochi that the change is most shocking of all. I almost screamed when I saw my favorite beach: The tropical park has been replaced by sky-high piles of concrete blocks. "This city is pure hell now," my friend Galia told me. "Money has taken over Sochi. They've beaten all the beauty and the love out of our city." A professional tour guide who's dedicated her life to attracting tourists to Sochi, Galia now wants to run away from home.

Even the birds have changed their mind about Sochi. In spite of the endless protests of ecologists, the central government in Moscow is building an Olympic Park for next February's games in Imeretinskaya Valley, a marshy flatland by the sea that offers a unique habitat to more than 200 species of migrating birds. Every year, swans, storks, and pelicans come here to enjoy the clear water of the lakes. Now, the lakes -- which are internationally recognized as a crucial ecological site -- are disappearing beneath the mud and noise and messy turmoil of Olympic Park construction. Both Greenpeace and the World Wildlife Fund have protested the damage to the area; three years ago a United Nations body expressed concern about the construction's effect on the local environment. Young Sochi activists have already documented the ecological consequences of Olympic development: dead dolphins on the beaches, trout dying in the rivers, swans swimming in the sea instead of their lake. But their whistle-blowing goes unheard, since many in Sochi (above all officials and businesses) profiting from the city's Olympic status the city. The government says that of the $30 billion poured into Sochi, only $6.6 billion is going straight into Olympic construction. The rest is supposed to benefit the city as a whole. And it's certainly true that there are new apartment buildings, shopping malls, and stores spring up wherever you look. But critics believe that as much as half of the money is going into the pockets of corrupt officials and businessmen.

Unlike the migrating birds, the families of Acacia Street have no other place to go. In vain they've sent letters to President Vladimir Putin, posted petitions on his Facebook page, and even trooped off to protest at his well-guarded official residence in Sochi. Their letters to the Kremlin were sent back to officials in the local, Moscow-appointed government. Those officials told them: "The more you complain, the worse you'll have it." Putin never responded, and the construction has continued, unimpeded.

Last weekend, with the initial phase of construction underway for a new federal highway running right on their property, Kirill's family called the police. "Somebody should stop them, they're destroying our property!" they reported. But the message the Acacia Street community received from the police was more than clear, as resident Yulia Saltykova told me: "He told us that this Putin is holding is hand over everything that's happening here. This is what Putin wants."
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