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Private investors helping with Sochi’s quest for gold

According to legend, Sochi is the place where Jason and the Argonauts disembarked to search for the Golden Fleece. Thousands of years later, the Russian resort city located on the shores of the Black Sea is embarking on a long journey of its own and, like Jason, is confident that rewards lie at the end of it. Sochi defeated the South Korean city of Pyeongchang and the Austrian resort of Salzburg last year to be awarded the right to host the 2014 Winter Olympics. It was an unlikely win but the president and CEO of Sochi’s organizing committee, Dmitry Chernyshenko, believes that the city of just over 300,000 inhabitants can rise to the challenge and use the opportunity to change the area forever. «The preparation and hosting of the Games will leave the greatest ever showcase of contemporary legacy, not only for the region or the country, but for the whole world,» he told Kathimerini English Edition yesterday on the sidelines of the SportAccord convention in Athens. Sochi has turned to private investors to help carry some of the weight of the construction projects. Russian natural gas provider Gazprom is building a 12-kilometer road in the Caucasus. The second-wealthiest man in Europe, according to Forbes magazine, commodities magnate Oleg Deripaska, is building «half of the Olympic park,» including the Olympic Village, according to Chernyshenko. The lure for investors is that they will then own the facilities they build in a rapidly developing resort. «This project is highly attractive in terms of return on investment,» says Chernyshenko. «The land is extremely expensive and they will be building multipurpose venues that will be operated after the Games as exhibition centers, sports centers and entertainment centers as well.» Sochi is currently known as a summer resort and Chernyshenko thinks that when the city’s winter facilities are up and running, it will become an all-year resort attracting 7 million visitors. Owning property in this area could be profitable. «There will be about half a million square meters of exhibition space right on the sandy beaches and in close proximity to ski and golf resorts,» he says. «The price for commercial land has increased four times since we won the bid.» In its original budget, Sochi estimates that it would spend $12 billion on infrastructure. Chernyshenko expects the final budget to be ready by the end of this year or the beginning of next but is certain that the 2014 Winter Olympics will be profitable. «The interest from big sponsors gives me confidence that we will generate good profit for the Games. At the moment, the books are balanced – investment in the Games is equal to the funding that we are getting from the federal government, the IOC and the marketing program.» The Sochi official is also confident that the Black Sea city will meet its deadlines and have everything ready two years before the Olympics. «Russia is rather a powerful country. It’s a big construction project but we have enough resources to deliver on time.» The Alpine Center is almost ready and some of the slopes should be open to skiers this Christmas. Greenpeace has criticized some of the construction plans in Sochi, claiming that it will take place inside a national park. The United Nations has also said that plans to build the bobsled track on Grushevy Ridge will damage local flora and fauna. Chernyshenko says that alternative sites for the track have been dismissed and he believes the environmental impact has been exaggerated. «I am from Sochi, this is my motherland. I grew up there and my parents still live there. So, of course I don’t want anybody to blame me that we built the Olympic Games at the cost of nature. Of course, the construction will affect nature but the question is how to control it, how to manage it and how to compensate it. «When the people complain that there will be some danger for nature, why did they not mention that we are increasing the space for the protected area by 10 times? We are doing such dramatic things to improve the environment that this argument seems incomparably small.» It is an argument that no doubt is being repeated in other parts of a resurgent Russia, which is developing rapidly. Come February 2014, hundreds of athletes will follow in the footsteps of Jason and the Argonauts and head to Sochi in search of gold. By then, it will be clear whether the city’s journey has been equally rewarding. [email protected]