Russia’s super-rich oligarchs are currying favour with the Kremlin by pouring cash into the country’s bid for the 2014 Winter Olympics. Basic Element, the vast industrial holding company of the metals magnate Oleg Deripaska, announced on Tuesday a $800-million investment in a sports complex near Sochi, the holiday town on the Black Sea which is leading Russia’s bid.
It follows confirmation last week from Vladimir Potanin that his Interros company will sink $300-million into the nearby Roza Khutor ski resort at Krasnaya Polyana.
The investments emphasise the new state order which requires patriotism and obedience from Russia’s tycoons if they want to avoid the fate of Mikhail Khodorkovsky, the oil company owner jailed on fraud charges last year after clashing politically with President Vladimir Putin. The Chelsea football club owner, Roman Abramovich, has been heavily criticised for taking his money abroad rather than backing sports at home.
It is thought the complex funded by Basic Element near Sochi will be used as the official Olympic village if Russia is successful in its bid. A company spokesperson, Yuri Tyamushkin, said it would construct a 3 000-capacity, 27ha settlement and a 40 000 sq metre sports palace. ”It’s a big risk for us because we don’t know if it will be profitable,” he said.
The complex will include elite kottedzhi for dignitaries as well as more ”democratic” low-rise flats, a spokesperson for the property developer, GVA Sawyer, told Vedomosti business daily.
Commentators believe cash injections into the Olympic attempt are a surety against attack by the Kremlin. ”These are political investments rather than economic ones,” said Michael Heath, an analyst at Aton brokerage in Moscow.
”Potanin has been kowtowing to Putin ever since Khodorkovsky was jailed because he thought his head would be next on the block,” he added. ”Deripaska is a man who pushed things to the limit in the past and needs some insurance.”
Kremlin insiders largely see the huge assets snapped up in murky circumstances in the 1990s as pieces of the state that big businessmen must demonstrate good stewardship of in order to keep.
Potanin (45) who owns the Norilsk nickel mining complex in the Arctic, is a native of the Krasnodar region where Sochi is situated and a regular holiday visitor to its ski slopes. He said last week that his investment in Roza Khutor would create jobs and enable the city to transform from a summer to an all-season resort.
Sochi was a favoured destination of the Soviet elite and is famed for its subtropical climate and dramatic backdrop of snow-capped Caucasus peaks.
It was shortlisted this month by the International Olympic Committee alongside Austria’s Salzburg and South Korea’s Pyeongchang to host the 2014 winter games. A final choice will be made in July next year. – Guardian Unlimited Â