Jan. 31 (Bloomberg) -- After Moscow was picked to host the 1980 Summer Olympics, Soviet leader Leonid Brezhnev considered backing out as he fretted over the costs and political risks. Not so Vladimir Putin, who’s dreamed of bringing the games back to Russia for two decades and has staked his legacy on success.
After personally overseeing an unprecedented $50 billion transformation of Sochi for next week’s Winter Olympics, Putin is betting more than treasure that he can showcase Russia’s achievements under his 14-year rule and prevent threatened acts of terror. To win, his prediction of a glitch-free games will have to be as prescient as Brezhnev’s foreboding over the 1980 event, which was marred by a U.S.-led boycott over the Soviet invasion of Afghanistan.
“At first, the Olympics were a dream for Putin, then a challenge, then a victory, and now a test,” said Dmitry Oreshkin, an independent political analyst in Moscow. “If something bad happens or the Russian team doesn’t do well, then he’ll be blamed for everything.”
For Putin, a judo black belt, the Feb. 7-23 competition marks the culmination of a quest that began in 1994, when, as deputy mayor of St. Petersburg, he led efforts to lure the 2004 Summer Games to his hometown. Then, as now, Putin, made it clear he’d do everything he could to achieve his Olympic goal. Seeking to create momentum for the bid in 1996, he ordered construction of sports venues to start even though final funding from Moscow hadn’t been approved.
“I will personally oversee the implementation of this order,” Putin, then 43, wrote in the June 3 decree, a copy of which Bloomberg News obtained from the city’s archives.
Putin, now 61 and the longest-serving leader in the post-Stalin era after Brezhnev, flew to Guatemala in 2007 to make that same pledge about Sochi, his summer residence, to the International Olympic Committee.
“The bid has the enthusiastic support of the whole of Russia,” Putin told IOC delegates in Guatemala City, delivering a rare speech in English. “We pledge to make the stay of Olympians and Paralympians, spectators, journalists, guests in Sochi a safe, enjoyable and memorable experience.”
Putin’s commitment hasn’t wavered, even amid vows of violence by Islamist extremists and boycott calls by rights activists over his anti-gay legislation. Brezhnev was far less certain the risks were worth it.
“Somehow it has come to pass that we have made the decision to hold the Olympics,” Brezhnev said in a letter to Konstantin Chernenko, a future successor, in 1975, according to a copy reprinted in a limited-edition book published last year by the Federal Archives Agency. “This event will cost colossal amounts of money” and could lead to “all sorts of scandals,” the Soviet leader wrote. “Perhaps we should reconsider the idea and decline to hold the Olympics.”
After a spate of bombings in southern cities killed more than 30 people last month, Putin, an avid skier, took to the slopes near Sochi to assure the tens of thousands of athletes, officials and spectators expected for the Olympics that they’ll be safe. Putin sealed off Sochi in January and deployed 40,000 police and special service officers around the city, which has a population of 345,000.
For Putin, just being able to afford to turn Sochi into what he’s called “‘the world’s biggest construction site” is a victory of sorts. Since Putin first became prime minister in 1999, a year after then-President Boris Yeltsin’s government defaulted on $40 billion of debt, economic output has doubled and the country’s international currency and gold reserves have swelled to about $500 billion.
Back in 1996, when Putin was pushing the St. Petersburg bid, Russia simply couldn’t afford to host an Olympics. Putin lost his job two weeks after he signed the construction decree when his boss, Anatoly Sobchak, was defeated at the polls. Yeltsin balked at the $20 billion sought by the new mayor, Vladimir Yakovlev, and the 2004 Games eventual went to Athens.
“Back then, we were inexperienced and couldn’t even imagine what a challenge organizing the Olympics would be,” Alexei Kudrin, who was deputy mayor alongside Putin and later served as his finance minister, said in an interview in Moscow.
For Putin, the road to Sochi started on the slopes of Sankt Anton am Arlberg in Austria’s Alps in 2001, while he was skiing with billionaire Vladimir Potanin and watching the Alpine World Ski Championships, according to Potanin.
“We were looking at everything there and thinking, why don’t we have something like this in our country,” Potanin, worth $13.6 billion according to the Bloomberg Billionaire Index, said in an interview in Moscow.
To advise on locations, Potanin turned to Ecosign Mountain Resort Planners Ltd., a Canadian company based in Whistler, the skiing venue for the 2010 Vancouver Olympics. They eventually settled on Rosa Khutor, a 1,534-meter peak near Krasnaya Polyana, a village on the northern slopes of the Caucasus Mountains, about 60 kilometers (37 miles) from Sochi.
“I went on a trip all around the Caucasus Mountains and finally visited Sochi and Krasnaya Polyana by plane, helicopter, UAZ jeep and motorcade,” Paul Mathews, president of Ecosign, said by e-mail. “I was very impressed by the overall terrain and beauty.”
There was one hitch, Potanin said. While the views from Rosa Khutor are stunning and the snow is soft and moist because of the nearby Black Sea, there was only a single, open-air lift to the summit. The initial cost estimate, $140 million, turned out to be “naive,” he said. It eventually took $2 billion to create Russia’s first state-of-the-art ski resort, which has 16 lifts and 77 kilometers of slopes.
“We took a piece of the Alps and brought it back to the Caucasus,” Potanin said.
The government first started seriously discussing the possibility of transforming Sochi and bidding for the games in 2005, when Leonid Tyagachev, then-president of Russia’s Olympic Committee, asked Potanin to help put together a presentation for Putin, already a supporter, and other senior officials.
“A lot of people were against it, saying it was a gamble, or that we wouldn’t be able to pull it off,” Potanin said. “But we turned the mood around.”
Kudrin, who participated in those early meetings, said everyone agreed that the project needed “unconditional state support” and that Putin himself would have to take full responsibility. “And that’s what he’s doing,” Kudrin said.
Back then, Sochi was a backwater and the idea that Russia could hold a major sporting event there seemed like “pure fantasy,” said Elena Anikina, who worked for Potanin and was a key negotiator in talks with the IOC.
“How can you have a resort, let alone the Olympics, when there are no roads, no electricity,” Anikina said, recalling her first reaction to Potanin’s proposal. “There were only mountains, snow, and protected national parks.”
The area now has 14 new sports venues, including the main stadium, which can seat 40,000, and an additional 19,000 hotel rooms, according to the Construction Ministry. Builders have laid 260 kilometers of roads, 200 kilometers of railroad, 54 bridges and 22 tunnels. The local electricity network, sewage system, port and airport have all been overhauled and expanded.
The media center alone is 155,000 square meters, an area six times larger than Moscow’s Red Square. Even the Russian Orthodox Church has joined the effort, building what is now the city’s largest place of worship. Putin attended a midnight service at the new church for Orthodox Christmas on Jan. 7.
For Putin, Sochi’s makeover isn’t all about the Olympics. It’s part of a wider push to boost the economy of the whole North Caucasus region, one of the poorest and most violent in Europe. It’s also part of a government effort to improve the way Russia is viewed around the world, Putin told a group of foreign journalists in Sochi in January.
“I would like the participants, fans, journalists and all those who watch the games on TV and follow them through the media to see a new Russia, see its face and its possibilities, and take a fresh and unbiased look at the country,” Putin said, according to a transcript on the Kremlin’s website.
Putin has lined up a string of events designed to keep the sparkling new Sochi in the spotlight, including the Group of Eight summit in July, which U.S. President Barack Obama and other world leaders are scheduled to attend. In October, Sochi will host Russia’s first Formula 1 Grand Prix and the city is one of 11 that will host soccer games during the 2018 World Cup.
Russians are mostly positive on the games’ impact. Sixty percent say large-scale projects like the Olympics and the World Cup bring do more good than harm to Russia, the All-Russia Center for Public Opinion said today in an e-mailed statement. A quarter say the damage outweighs the benefits, according to the survey of 1,600 people, which had a margin of error of 3.4 percentage points.
Now, it’s all about making sure Russia puts on a world-class Olympics and Putin is leaving nothing to chance. Back in Guatemala City, he dismissed concerns that Sochi’s temperate climate could lead to a lack of snow, saying, “real snow is guaranteed.” And so it is. More than 700,000 cubic meters was stockpiled last year, according to the Construction Ministry. It won’t be needed, Potanin said, because there’s enough fresh snow for “for several Olympics.”
With the opening ceremony just days away, organizers are promising a spectacle that will wow the world, while keeping the details secret. Visitors, athletes and volunteers are already descending on the city, the Sochi Organizing Committee said in an e-mailed request for comment.
“The final touches are being put in place to make for a warm welcome,” the committee said. “Now is the time for athletes to take center stage and put on the greatest show on earth.”
The agency in charge of the pageantry is also promising a spectacle. Some 3,000 people are working on the opening ceremony, which will feature a stage serviced by 40 elevators and a 9,000-ton roof fitted for special effects.
“It will be an unforgettable show,” Andrei Nasonovsky, the head of the agency, said in an interview in Sochi. “It’ll have everything from grandiosity to sentimentality.”
If past is prologue, Putin will declare the Olympics a triumph no matter what happens, just as Brezhnev did in 1980, when he bestowed awards on more than 5,000 Soviets for their work on an event that was spurned by more than 60 nations.
After 20 years of trying, though, Putin is shooting for more than just a well-run games. He wants his Olympics, as he told the Russian team in Vancouver in 2010, to be “cool.”
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