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Putin Tells Abramovich to Open Wallet for World Cup

Russian Prime Minister Vladimir Putin said billionaire Roman Abramovich, owner of English soccer champion Chelsea, should help to finance stadium construction for the 2018 World Cup.

“I don’t rule out that Mr. Abramovich may take part in one of these projects,” Putin told reporters in Zurich last night in televised comments. “Let him dip into his pocket a bit. It’s no big deal; he won’t feel the pinch. He has plenty of money.”

Putin said Russia will spend 300 billion rubles ($9.6 billion) to build 13 stadiums and to renovate three more in 13 host cities, including Sochi, home of the 2014 Winter Olympics. OAO Lukoil, Russia’s second-largest oil producer, plans to build a stadium in Moscow, and another will be constructed with financial support from state-run lender VTB Group, he said.

The Federation Internationale de Football Association, or FIFA, soccer’s world governing body, yesterday chose Russia to host the 2018 tournament over England and joint bids from Portugal and Spain and Belgium and the Netherlands. Putin flew to Zurich after the announcement to discuss Russia’s plans with Sepp Blatter, president of FIFA.

President Dmitry Medvedev said today that Russia’s success is “pleasant, long-awaited and in part even unexpected.” FIFA’s decision “is a recognition of our country’s potential in sports and other things,” he said in televised comments.

Stocks May Outperform

A ticket to the tournament will double as a visa to enter Russia, Medvedev said.

Abramovich is ready to contribute toward financing construction for the tournament “in partnership with the state,” RIA Novosti reported, citing the billionaire’s spokesman, John Mann.

Russia’s winning bid may help the country’s main stock indexes to outperform other emerging markets by as much as 10 percent over the next three months, VTB Capital analysts wrote in a report today.

Steelmakers surged after the announcement on anticipation of increased demand from the World Cup building boom. OAO Severstal, Russia’s largest steelmaker, rose 5.2 percent yesterday and was up 3.3 percent to $15.85 at 5:30 p.m. Moscow time today in London trading. OAO Novolipetsk Steel closed 7.3 percent higher yesterday and advanced 4.2 percent to $42.73 in London today.

Tourism Infrastructure

Abramovich is a shareholder in steelmaker Evraz Group SA, which soared 5.2 percent yesterday and was up 4.6 percent to $35.25 at 5:30 p.m. Moscow time today in London trading. Forbes magazine estimates his wealth at $11.2 billion, making him Russia’s fourth-richest man.

The total bill for Russia’s World Cup preparations may exceed $50 billion, the Vedomosti newspaper reported today, citing Marina Udachina, head of the Institute for Innovation, Infrastructure and Investment.

In addition to stadium construction, Russia pledged about $11 billion of investment in tourism infrastructure, primarily to increase the number of three-star hotels and budget accommodation, according to materials on FIFA’s website.

Russia will have to build 7,711 kilometers (4,791 miles) of roads and lay 2,024 kilometers of rail track by 2018 at a cost of about $35 billion, Udachina told Vedomosti, based on FIFA’s report.

‘High Risk’

Russia committed to make “major upgrades and capacity increases” at most airports serving the host cities. FIFA assessed Russia’s ability to provide requisite airports and international connections as a “high risk.”

“Even with planned renovations, some airport capacities would still not meet requirements,” FIFA concluded. “The required temporary facilities were proposed, but without guarantees.”

Finance Minister Alexei Kudrin said yesterday that expenditures on the World Cup would be “significantly less” than on the 2014 Winter Olympics, according to the ministry’s website.

“We have a lot do to -- stadiums, airports, roads,” Putin said. “But this presents us with a challenge, and this is the advantage of our bid. It means the development of world football, but also the development of roads and transportation infrastructure for our country.”

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