Thu, Feb 26, 2009 - Page 18 News List

Budget for Winter Olympics in Sochi slashed for 2009

AP , MOSCOW

The budget for the state company overseeing much of the construction work for the 2014 Winter Olympics in Sochi will be cut by two-thirds this year, a top Russian official said on Tuesday.

Russian Prime Minister Vladimir Putin, meanwhile, urged companies to honor their commitments in Sochi and organizers announced a US$180 million top-tier sponsorship deal with state oil company Rosneft.

This year’s budget for the Olympstroi company was originally set at nearly 50 billion rubles (US$1.4 billion), but now will be cut by 33 billion rubles, Regional Development Minister Viktor Basargin said in a meeting with Putin’s council on sports.

Basargin also said that some of the funds cut this year would be compensated for by money that had been budgeted in the past two years but not used.

Putin acknowledged that the country’s economy was going through a “difficult time” and called on private business leaders to keep their promises regarding construction projects in Sochi.

“However hard it is, one should begin financing the projects or give them back to us,” Putin said without naming the companies or specific projects.

Some of Russia’s biggest corporations have committed to various Olympic projects — ranging from roads to construction of ski resorts.

Most of these companies have been badly hit by the crisis, including Oleg Deripaska’s investment vehicle Basic Element, which is supposed to play a big role in delivering the Olympics.

Deripaska has recently sold some of his assets and is facing margin calls from creditors. He has been widely reported to be asking for government aid for his failing enterprises.

Putin mentioned that 20 Olympic projects — which he described as “commercially lucrative” — still have not attracted investors.

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