Russian oligarchs who helped finance the most expensive Olympics in history are shedding their shares of the line, leaving it barely running.
Finding rock bottom after the Sochi 2014 Winter Olympics hasn't been easy. The cost overruns alone would seem to spell disaster in no uncertain terms, but not everyone agrees. The International Olympic Committee refuses to think of the Sochi games as a failure at all. Just last week, one year after the launch of the games, the IOC released a fact sheet praising the event as an unmitigated success, even in terms of its legacy for Sochi and the surrounding region.
Meanwhile, facing an economic downturn framed by falling gas prices and crushing international sanctions, Russian oligarchs are running from their assets in Sochi. The Associated Press reports that two of the oligarch investors who paid in part for the most expensive Olympics in history have already shed $3 billion in Sochi properties, leaving it to Russian taxpayers to pick up the tab.
The most prominent of Sochi's infrastructure works deserves special attention. The combined highway-and-high-speed-rail project connecting the coast to the mountains was the most expensive part of the Sochi Winter Olympics. At $8.7 billion, and its useful life almost over, the Adler–Krasnaya Polyana high-speed railway might just be the most expensive rail project in history.
The 31-mile line connects Adler, a city on the coast of the Black Sea along the border of the breakaway Georgian republic of Abkhazia, with Krasnaya Polyana, a ski-resort town in the Caucasus Mountains. Its construction exceeded projected costs by at least 90 percent, according to the Anti-Corruption Foundation, which has compiled a map detailing the excesses of the Sochi Winter Olympics. The map is the work of Russian activist Alexei Navalny, a fierce political opponent of Vladimir Putin who has been targeted by Russian prosecutors in what may be an effort to silence him.
The map's conclusion on the Sochi rail-and-road project? For the cost, planners might've bought each of the 5.2 million residents of the Krasnodar region a new refrigerator. The Adler–Krasnaya Polyana line alone cost nearly as much as the entire Vancouver 2010 Winter Olympics.
As Navalny and other critics maintain, the Adler–Krasnaya Polyana line was built by Putin loyalists, namely Russian Railways chief Vladimir Yakunin and the subcontractors commissioned by his company. A Bloomberg Businessweek postmortem on the Sochi Winter Olympics explains what the rail project means to both Russian Railways and Putin's Russia:
[Russian Railways] oversees 52,000 miles of rail track, the third-largest network in the world, and employs nearly a million people. The 31-mile Adler-to-Krasnaya Polyana project is among its most ambitious, reminiscent in its man-against-nature quality of the Baikal-Amur Mainline railway built by the Soviet Union in the 1970s and ’80s across the remote taiga forests of the Russian Far East. Now, as then, grandeur and showmanship are as important as the finished project. Putin sees the Sochi Games as a capstone to the economic and geopolitical revival of Russia, which he has effectively ruled for 14 years. The route connects the arenas and Olympic Village along the Black Sea with the mountains above. Andrey Dudnik, the deputy head of Sochi construction for [Russian Railways], is proud of his company’s accomplishment, given the region’s difficult terrain and the rushed time frame for finishing construction. “Few people believed,” he says. “But we did it.”
Along with the Adler–Krasnaya Polyana line, Russian authorities built a perpendicular spur between Sochi and Adler, connecting the city with the airport by rail. While the alpine line and highway accounted for some $8 billion of the overall project costs, the Sochi–Adler line was greeted by many as the infrastructure investment that would serve Sochi best after the games.
Now, just one year after the Sochi 2014 Winter Olympics—and a little more than a year into the railway's life span—the trains are barely running. "Tourists who came to Sochi this winter to ski found only six trains a day running between the coast and the mountains, and no trains running between the airport and central Sochi," the AP reports. "During the Olympics, there were trains rolling along the picturesque ravines of the mountain resorts every 15 minutes."
Russian Railways still lists "Lastochka" trains leaving every hour from Olympic Park to Krasnaya Polyana. But The Wall Street Journal confirms that rail service has been suspended to the airport, and sharply curtailed everywhere else, as of this year.
As for the new motorway running from the coast to the mountains, it was hardly necessary in the first place, according to Navalny's Anti-Corruption Foundation. The site says that the road was designed to move 20,000 people per hour, but the maximum capacity of all the resorts that it reaches is a little more than 30,000 people—who were already served by another highway anyway.
Between the collapse of the ruble and deteriorating relations with Europe, doubts are mounting about Russia's viability as the host for the World Cup in 2018. In The Daily Telegraph, Paul Hayward warns that "2018 could yet end up as the ultimate political football." Three years may be too far off to predict boycotts like the world saw in the Moscow 1980 Summer Olympics and the Los Angeles 1984 Summer Olympics, but national protests are certainly possible.
What looks clear even this far out is that Russia's high-flying infrastructure plans won't come together by 2018. Putin's vision for the World Cup is enough to make the biggest Sochi booster blush. Just a year and a half ago, Russian Railways announced plans to build more than $157 billion in high-speed rail projects linking World Cup host cities across western Russia.
FIFA is sure to howl if Russia fails to deliver on its contractual obligations to provide free ground travel and control hotel costs throughout the World Cup (absurd though those obligations are). That may for the best. It's the eager acquiescence of host cities in authoritarian countries that sends expectations and costs soaring for hosting worldwide sporting events. And that's what's turning democracies off hosting mega-events altogether. Some Western cities could host events like the Olympics with existing facilities and smart infrastructure upgrades, but those bids will never beat a promise from Putin for free high-speed rail running everywhere.
That's how Russia can build a single, useless rail-and-road to nowhere for the same costs as putting on a whole Olympic Games in a major Western city—and the International Olympic Committee will call it a success. Some 4,000 workers could die building facilities for the 2022 World Cup in Qatar—and FIFA doesn't call this a crisis. String together enough of these so-called successes, and a record of failure will be plain. It may be already. If the committees responsible for the Olympic Games and World Cup come to rely on ever-more outlandish bids from Moscow, Beijing, Almaty, and Qatar, then cities in democracies will stop bidding altogether, and the prestige of these events will be tied to the pitiless whims of totalitarian planners.
It would be wishful thinking to hope that Russia or FIFA will have learned the right lessons from Sochi. But between its economic setbacks and international conflicts, Russia may not be in a position to pull off a World Cup on the same scale by 2018. The country simply might not be able to build to Sochi levels of extravagance under the circumstances. Again, that's for the best. Frankly, it would be hard for planners to top Sochi for a rail system used by fewer people over a shorter time span for higher costs.