By Duncan Mackay in Sochi


Sochi is the Russian Riviera, the brochures claim. Sand and pebble beaches stretch nearly 20 miles along the Black Sea coast where you can swim in the sea from April through until October, and ski on the nearby slopes from October into May. The semi-tropical weather allows for a lush terrain found nowhere else in Russia.


Once a sleepy Soviet-era ski resort in the Caucasus mountains, near Prime Minister Vladimir Putin's summer residence, it is now undergoing probably the biggest change that a Russian city has ever seen in peace-time. Everywhere you look there are cranes, diggers and thousands of workmen scurrying around as the pace of the largest and most expensive construction project in Russia's modern history begins to pick-up.



The award in July 2007 of the 2014 Winter Olympics and Paralympics has put Sochi on the world map. Having been instrumental in Sochi being given the Games, after he travelled to Guatemala City to lobby personally on their behalf when he was Russia's President, it is a project that has the personal attention of Putin, who is demanding nothing less than the best Winter Games ever. From the moment you land at Sochi International Airport, you are left in no doubt that this is a city being transformed.


Over the next five years, Russia has to build the nation's largest sport centre in compliance with international standards. The Russian Government has adopted a special Federal programme with an aggregate budget of around $12 billion (£7.5 million). Of this, $7.3 billion (£4.5 billion) will be provided from the Federal budget, $400 million (£260 million) by the Krasnodar Province and the Sochi authorities, while the remaining $4.3 billion (£2.6 billion) will be provided from private sources.


The Sochi Games will set an all-time record in the level of funding. To compare, the 2006 Turin Winter Games had a price tag of $2.7 billion (£1.7 billion), Salt Lake City in 2002 $1.32 billion (£828 million), and Nagano in 1998 $2 billion (£1.2 billion). But in Sochi, not only sport facilities but the entire vital infrastructure, too, will need to be built from scratch, including the transportation network.


Almost $4.2 billion (£2.6 billion) - more than two thirds of the entire budget - is to be spent on building 200 kilometres of roads and railroads to ensure access to all Olympic facilities. In Sochi itself 10 new multi-level highway intersections will be built, as well as a street parallel to Kurortny Prospekt, the city's main thoroughfare which is already clogged with heavy traffic.


One of the most complex and challenging projects will be a 40km railway line linking the Krasnaya Polyana mountain area that will host all the key ski venues with the Imereti Valley, where the main sport facilities for the Winter Olympics will be built. There will be a total of 15 venues: ski jumps, biathlon and ski complexes, a bobsleigh track, an indoor skating rink, two ice hockey arenas, a snowboard park, and a freestyle centre.


In addition to that, two Olympic villages will be built with four and five-star hotels, a Federal spa area, and a man made luxury island shaped like the Russian Federation in the Black Sea. All of that will require substantial amounts of electric power so new generating facilities will be built by 2014, ensuring power consumption at three times the current levels.


The man overseeing all this is Dmitry Chernyshenko (pictured), a native of Sochi who was appointed chief executive of the bid in November 2005 and is now in charge of delivering the massive project. A graduate of the Moscow State Technological University, whose interests include martial arts, downhill skiing and motor racing, he made his reputation in marketing.


He probably has Putin's number on speed-dial in his mobile. "He is still the captain of our team," Chernenko tells insidethegames during a recent visit to Sochi. "He is aware of all the details and is controlling the project at all levels. It is his personal commitment and personal challenge. We will not let him down."


Chernyshenko, who is one of the keynote speakers at the Global Sports Industry Congress to be held in London on October 18 and 19, claims that the fact that Sochi has to build so much from scratch is a fantastic opportunity for the area. "It is a great challenge to execute such a construction project within a certain period of time," he says. "The Sochi 2014 Olympic and Paralympic Winter Games will indeed give Russia an opportunity to prove its unrivaled track-record in successfully delivering large-scale construction projects, while leaving an extraordinary sporting legacy.


"The Games in Sochi will boast the largest number of brand-new state-of-the-art facilities ever built specifically for an Olympic Winter Games. The Games in Sochi will offer a once-in-a-lifetime opportunity to establish a winter sport capital in Russia, the world's largest winter sport country."


In order to attract investors, local authorities have declared the Sochi Games an "investment Olympics." Today, the Krasnodar province is ranked third in the country in terms of foreign investment. At a recent economic forum in Sochi the city saw the signing of a number of new investment agreements worth a total of $22 billion (£13.7 billion). The majority of these contracts will focus on building the infrastructure for the Olympics.


According to Krasnodar Province Deputy Governor Alexander Remezkov, the number of people holidaying in the region has been steadily growing from 12 million in 2006 to 15 million in 2007 and is expected to surpass the 20 million mark within the next few years. That is the main guarantee that investment in the Olympic infrastructure will be recouped many times over.



"The Sochi 2014 Games plan presents an ambitious technical concept and an unprecedented legacy, which will go down in Winter Olympics history," says Chernyshenko. "The Sochi Games will provide our nation with the first-ever alpine winter sports training and competition facilities for the Russian athletes and their counterparts from other countries in the region. This would be an unparalleled legacy for Russia and the international sports movement.


"For the first time in Winter Games history, the main Olympic Stadium, Olympic Family hotels, the five venues for ice events, the main media centre and the Olympic Village will be based in the ‘Olympic Park' situated on the stunning Black Sea coast.


"Sochi 2014 will see the development of 11 custom-built, state-of-the-art venues - the largest number in the history of the Winter Games. Sochi 2014 is a priority for the Russian Government and a long-term priority for the nation. Russia has an unrivaled track record in successfully delivering large-scale construction projects, which is a key asset for Sochi's ambitious Games plan.


"This is literally a Russian one [project] and not that of a single city because all the country supports this effort. We enjoy full support of the state because this project will comprehensively re-develop Sochi and the region nearby, envisaging mutually profitable co-operation of the state and private business. We also enjoy full public support. According to recent polls 80 per cent of the population in Russia support the bid.


"This investment is not just for the Olympic bid but also infrastructure in the region first of all aimed at building a year-round resort to become one of the most interesting and recognisable worldwide and to give fresh impetus to winter sports. I want these Games to become innovative and in order to implement this dream we are trying to foresee many things."


Chernyshenko is buoyed by the fact organisers are already set to easily outstrip the sponsorship $800 million (£501 million) target they set with Russian companies eager to invest. With Megafon, Rostelecom, Rosneft, Sberbank and Aeroflot already signed-up, Volkswagen were last month unveiled as the latest Tier One sponsors in the automobile category, which London 2012 organisers have found it very difficult to fill. It took the total Sochi had so far raised in sponsorship beyond $750 million (£470 million), justifying Chernyshenko's claims that the Games are largely immune to the current worldwide economic crisis.


Another bonus is that the credit crunch had driven down construction prices and increased competition among contractors. Since November though, the Russian rouble has also lost over a fifth of its value while real estate and construction are among the sectors worst hit by the credit crisis, making the facilities needed for the Games cheaper to build. The hope is that by the time they start in 2014 the world's economic cycle will again be on an upward swing. "With the current economic situation certainly everybody is facing difficulties," Chernyshenko says. "But crisis is also a time for opportunities...if you are smart and use the situation. Sponsors consider Sochi a long-term investment. Sochi is a bit like an Olympic oasis... because the money is already in place."


Other Olympic cities like Vancouver, which will host the 2010 Winter Games, and London, hosts of the 2012 Summer Olympics, have already felt the financial pinch recently. Vancouver had to revise its Olympic budget while London has had to face severe funding problems with its biggest project, the Olympic Village. Chernyshenko claims it would be wrong to compare Sochi with these two cities given the 2014 Games are still five years away and could be held in a completely different economic climate.


"We have a very different life cycle of the Games," he says, pointing to the recent sponsorship deal was proof of that. "We did not underestimate the Olympic brand value despite the economic downturn. But here is a sense of Olympic immunity. It is my aim to make the preparations from the Games recession-free."


A Games build-up free of financial concerns and completed on time would be a novelty indeed but Chernyshenko's strident claims that Sochi will do it brooks no argument. "All sports and non-competition venues will be delivered by the end of 2012 and so far we are on track," he says. "We will deliver everything in full."


Failure is not a word that appears to exist in Chernyshenko's extensive English vocabulary. "Strong Government support, coupled with Russia's passion for achievement and excellence in sports, serve as a guarantee to the IOC that Russia will deliver its outstanding Olympic vision for the benefit of sports enthusiasts around the world," he says. "Russia is a historical and committed partner of the Olympic Movement, which recently celebrated 50 years of participation in the Olympic Games."


According to Russian Olympic Committee President Leonid Tyagachev, Sochi will generate between $16 billion (£10 billion) and $23 billion (£14.4 billion) in long-term profits, while Vyacheslav Fetisov, head of the Federal Sports Agency, adds that after the 2014 Games the sport facilities will be used 100 per cent. "Over 5,000 sport events are held in Russia every year," says Fetisov. They will also attract tourists from neighboring countries, where sport infrastructure has deteriorated during the post-Soviet years. Finally, the Sochi facilities will also be used for Paralympic Games.


Experience suggests that Olympic Games provide a boost to the development of the region where they are held. Thus, Salt Lake City, a mid-size city in the United States, made a major breakthrough after hosting the 2002 Winter Olympics: the number of tourists doubled, while the number of skiers tripled from 400,000 to 1.2 million a year. Investors made no mistake: since the 2002 Games, 23 World Championships have been held there. Major advertising and telecommunications companies opened their offices in the area - the city received a total of 2,000 applications from various businesses.


Undoubtedly, the 2014 Olympics as a major investment project will help revitalise not only the Southern Federal District but will also have a positive impact on the national economy as a whole. An estimate made by Russia's Economic Development and Trade Ministry suggests that in the run-up to the Olympics demand for goods and products from most sectors of the economy - from construction materials to machine manufacturing - will grow by 50 to 60 per cent, while the gross regional product will grow by an additional 400 billion rubles (£10 billion) within the eight-year span in 2006-2014.


The Games have already been priceless to Sochi, Chernyshenko claims. "The Olympics is promoting to the entire world the unique setting of Sochi and its region, thus raising the region's profile as a world-class resort. Today, visitors from all around the world know that in Sochi they will find the best snow conditions, only one hour from the sunny beaches of the Black Sea, but also a great cultural and festive ambiance."


Dmitry Chernyshenko, the chief executive of Sochi 2014, host city of Winter Olympics, will appear at the Global Sports Industry Congress in London on October 19.  For more details on the Global Sports Industry Congress click here.


Duncan Mackay is the publisher and editor of He was the 2004 British Sports Journalist of the Year and was the athletics correspondent of The Guardian for 11 years, being the only British daily newspaper writer to correctly predict in 2005 that London's Olympic bid would be successful