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Russia, Qatar to Host World Cups as Emerging Economies Win Vote

FIFA President Joseph S Blatter
FIFA President Joseph S Blatter names Russia for the hosts of 2018 during the FIFA World Cup 2018 & 2022 Host Countries Announcement at the Messe Conference Centre in Zurich, Switzerland. Photographer: Laurence Griffiths/Getty Images

Dec. 2 (Bloomberg) -- Russia and Qatar won rights to host World Cups in 2018 and 2022 as soccer’s governing body voted to hold the events in emerging markets.

FIFA awarded the tournaments today after a secret vote at its headquarters in Zurich. Russia beat England and joint bids from Portugal-Spain and the Netherlands-Belgium for 2018, while the Qataris defeated the U.S., Japan, South Korea and Australia for the event four years later.

The decision means that FIFA will hold the world’s most-watched sporting event in developing nations four times in a row. South Africa held the World Cup this year, and Brazil is preparing for the 2014 tournament. The next two events will be held in Eastern Europe and the Middle East for the first time. Russia had to overcome concerns about its size and ability to build stadiums, while the Qatar bid, the only one with a “high risk” rating from FIFA, will air-condition stadiums to deal with temperatures of 46 degrees centigrade (115 degrees Fahrenheit).

“Thank you for believing in change, thank you for expanding the game and thank you for giving Qatar a chance,” the country’s bid chairman, Sheikh Mohammed bin Hamad Al-Thani, said after the victory. “We will not let you down.”

The Russian victory gives Prime Minister Vladimir Putin his third success in attracting global sports events to boost the economy and rebuild the country’s image as an athletic superpower.

Putin didn’t attend the ceremony, though his spokesman, Dmitry Peskov, said earlier today that the prime minister would fly to Zurich if Russia’s bid was successful, RIA Novosti reported. First Deputy Prime Minister Igor Shuvalov headed the Russian delegation.

Making History

“You have entrusted us with the FIFA World Cup for 2018 and I can promise, we all can promise, you will never regret it,” Shuvalov said today to FIFA delegates. “Let us make history together.”

Putin’s drive to bring the World Cup to Russia came after he delivered the 2014 Winter Olympics and a Formula 1 Grand Prix car race starting in 2014, both to be held in the Black Sea resort of Sochi.

Hosting the tournament is worth about $5 billion, according to U.S. estimates. For Russia, FIFA’s decision may speed infrastructure development and boost shares of airlines and steelmakers, though it could cost “tens of billions” of dollars to pull off, analysts said.

‘Major Upgrades’

Russia’s bid includes construction of 13 stadiums and renovation of three more at a projected cost of $3.8 billion and an operating budget of $641 million for 2017-2018. Russia committed to make “major upgrades and capacity increases” at most airports serving the 13 proposed host cities.

FIFA assessed Russia’s ability to provide requisite airports and international connections as a “high risk” in its bid evaluation report. All aspects of England’s bid were rated as “low” or “medium” risks.

Russia’s victory will have “an immediate positive reaction in stocks such as steel and others that would benefit from an expected rise in infrastructure spending,” Chris Weafer, chief strategist at Moscow-based UralSib Financial Corp., wrote in a note to investors before today’s announcement.

Weafer said earlier this week that OAO Aeroflot, Russia’s largest airline, media companies and banks “as a Russia proxy” may also benefit.

Qatari Success

Qatar, projected by the International Monetary Fund to have the world’s fastest-growing economy this year, plans to more than double the number of hotel rooms, build nine stadiums and refurbish three others and construct a rail and metro network for the tournament.

“It will probably be the fastest-growing economy in the world for a sustained period,” said Akber Khan, a director at Al Rayan Investment in Doha. The World Cup “will significantly accelerate massive infrastructure building in Qatar.”

Last month the gas-rich Persian Gulf state was the only candidate country that FIFA inspectors ranked “high” in overall operational risk, since it still needs to build most of its accommodation and facilities. The inspectors also noted that Qatar’s summer temperatures could pose a health risk to players, officials and spectators.

Holder of the world’s third-largest gas reserves, Qatar is using petroleum wealth to transform itself into a sports and cultural capital with plans to invest $100 billion on infrastructure projects in the next four years, Finance Minister Yousef Hussain Kamal said in June.

Building, High Temperatures

The country plans to spend $4 billion on the stadium construction and refurbishment program. Each facility will be designed with a solar-powered air-conditioning system.

The country plans to build a rail and metro network, costing more than $25 billion, in Doha and extending to cities outside the capital. It’s also planning the longest bridge in the world to connect to the nearby island kingdom of Bahrain, and aims to open a new airport next year.

A new 200,000-population city called Lusail, north of the capital, is scheduled to be built over the next decade and will feature the stadium that hosts the World Cup final.

The vote for the two events was marred by FIFA’s suspension of two executive committee members last month following a corruption probe into bids to host the World Cup. Its decision-making body was reduced to 22 members as Nigeria’s Amos Adamu was suspended for three years and fined 10,000 Swiss francs ($10,120) and Tahiti’s Reynald Temarii was banned for a year and fined 5,000 francs after the reporters from the Sunday Times of London reported that the pair were willing to trade votes for cash.

To contact the reporters on this story: Anastasia Ustinova in St. Petersburg at austinova@bloomberg.net; Robert Tuttle in Doha at rtuttle@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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