After euphoria, Russia mulls World Cup cost
As the euphoria from winning the right to stage the 2018 World Cup faded on Friday, Russia grappled with the challenge of rebuilding crumbling Soviet-era infrastructure to host soccer's showpiece competition.sports Updated: Dec 06, 2010 01:36 IST
As the euphoria from winning the right to stage the 2018 World Cup faded on Friday, Russia grappled with the challenge of rebuilding crumbling Soviet-era infrastructure to host soccer's showpiece competition.
Local media hailed Prime Minister Vladimir Putin and his deputy, Igor Shuvalov, for winning a “fairy tale” victory for Russia's soccer fans.
“You can take me at my word: the 2018 World Cup will take place according to the very highest standards,” Putin said after flying to Zurich to thank the governing body, FIFA. He said the infrastructure would be ready on time and the cost would be borne partly by Russia's biggest companies including Gazprom and the oil company LUKOIL.
Finance Minister Alexei Kudrin said that the main expense would fall after the completion of the sites for the 2014 Winter Olympic Games. “The main expense load will be starting from 2013, after we finish all the Olympic sites,” he said. Whatever the figure, the challenge is huge. Russia must repair or build thousands of kilometres of roads and railway tracks while upgrading airports, telecommunications and hotels throughout the land.
The Kremlin made a plea for people to refrain from stealing the money, a stark reminder of the corruption that accompanies almost every major Russian infrastructure project.
“Let's do it without kickbacks,” Kremlin chief economic adviser Arkady Dvorkovich wrote on Twitter.
Russia is ranked as the most corrupt G20 country by anti-graft groups and has been cast in leaked U.S. diplomatic cables as a state ruled by a venal bureaucracy that creams off cash from sales of its vast oil and gas reserves.
Compared with the nominal gross domestic product of $1.2 trillion, forecast to double over the next decade, the investment figures are modest, as is the projected growth effect. Shares in Russian steel companies rose after the bid. “The scale of the required infrastructure upgrades is massive,” the investment bank VTB Capital said in a note to its clients. “There is a strong desire to go beyond what is absolutely necessary.
Plus the propensity for embezzlement must be taken into account as well. We therefore estimate the potential 2018 World Cup-driven investment at $20 billion for now.”
First Published: Dec 05, 2010 23:17 IST