Russia’s World Cup Is The Most Costly To Date

June 14, 2018

The 2018 World Cup is about to kick off in Russia.  This year’s event has been mired by unusually high levels of corruption, as well as claims of mass overspending by the Russian government in preparing the country for one of the world’s largest sporting events.

This year’s World Cup is set to be the most expensive in the event’s history, despite the fact that organisers refused some of Russia’s plans and numerous projects ran well over their preparation deadline.  All in all, the total estimated spending for this year’s World Cup in Russia is 883 billion rubles ($14,2 billion), compared with Brazil, which had previously held the record after spending $11,6 billion on hosting its World Cup in 2014.

Back in 2009 the Russian government’s initial plan was to spend no more than $10 billion.  The figure was thrown around by Vladimir Putin, who was a prime minister at the time, at a conference in Zurich after Russia was named a potential host country for the World Cup.

The top 3 spending categories for Russia this time around have been: transport ($6,11 billion), reconstruction of stadiums ($3,45 billion) and accommodation infrastructure ($0,68 billion).  It was initially planned that 14 cities and 16 stadiums will take part in championship, although in the finalised plan the number was cut down to 12 stadiums in 11 cities.

Many transport infrastructure projects remain incomplete, such as a high-speed railway between Moscow and Sochi and high-speed express trains from Moscow’s airports to the city centre.  Nevertheless, the Russian Ministry of Transport is certain that these hindrances “will not affect the quality of transport services during the World Cup”.

The Kremlin’s initial cost sheet estimated the total cost of construction at around $20,68 billion, more than half of which – $10,47 billion – was supposed to come from the federal budget. The document was changed 35 times since its initial creation as well as a further 12 times in respect to sources of finance.  The government eventually managed to cut the numbers down by removing a number of previously planned building projects. On the other hand, other costs increased due to the allocation of additional funds aimed at reconstruction and renovation.

Plans to reduce costs had been going on throughout 2013 to 2016. Most of the reduction was due to a decrease in the number of hotels that had to be constructed by private investors, reducing the overall sum by a further 26 billion rubles ($417m).  Yet, since 2016, Russia’s World Cup budget has only been on the rise, primarily due to putting the finishing touches on the construction of sport facilities.

Since Russia was chosen to host the World Cup, stadium costs have been increasing day by day as well as the cost of new transportation infrastructure, while the construction of a new runway at Moscow’s Sheremetyevo airport — which remains incomplete until this day — saw its budged rise by 60%.

A building project on the scale of the World Cup entails favourable multi-billion dollar contracts to the companies of individuals close to the Putin regime, as well as the opportunity to embezzle millions of dollars worth of funds and materials, leaving vital building projects literally stuck in the mud.

Leonid Bershidsky at Bloomberg has suggested that this form of corruption, which is so integral to the Putin regime, could explain Russia’s failure to meet its spending targets.  Bershidsky claims that “the Russian government has obviously tried hard to internalise the lessons of Sochi and avoid huge misspending. But the Putin system, in which inflated cost accounting on government projects is one of the biggest sources of private wealth, is simply not designed to build things cheaply.”

Overspending isn’t the only thing concerning Russians about the 2018 World Cup.  Multiple reports have been made over recent months of local stray dogs being systematically exterminated in preparation for the event, and local residents being warned not to step out onto their balconies for risk of being mistaken for an attacker and shot by police snipers.

Many game-changing political events have taken place since Russia was officially selected to host the World Cup in 2010.  The annexation of Crimea and support for a separatist war in eastern Ukraine, the shooting down of flight MH17 by Russian-backed rebels and the Sochi Olympics state-sponsored doping scandal have fundamentally altered perceptions of Russia in the West, as well as the relationships between Western leaders and their Kremlin counterparts.  Nevertheless, fans from across the world are making the journey to watch the game that supposedly transcends politics.  Meanwhile, the true cost and damage of the 2018 World Cup will become clearer in time to come.

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