Russia Cuts 2014 Olympic Budget
Russia has cut its budget by 15% as host for the 2014 Winter Olympics, which will be held in the Black Sea resort Sochi.
After experiencing years of a flourishing economy, Russia has been hit hard over the past few months and the government’s 2009 budget is expected to show a deficit for the first time in 10 years.
As a result, an assessment of the Olympic construction projects began in November to seek out where funds could be saved. According to the Deputy Prime Minister Dmitry Kozak, the assessment revealed it would be possible to save about £5.8bn. Specifically, it was found that the cost of four of venues had been overestimated by 7.5bn roubles (£150m).
Along with overestimating the costs, another reason for the 15 percent decrease is the recent drop in price of materials, according to Russian government officials.
However, media reports suggested the budget cut is due more to financial problems enountered during the planning process, as opposed to simply overestimating the costs.
Preparations for the Games have reportedly been affected by both a lack of interest from bidding firms for projects and challenges in acquiring the necessary land to begin construction for Olympic facilities because owners are refusing to sell.
