Russian World Cup loss warning

The loss of the rights to host the football World Cup would be a devastating blow to Russia, particularly with the planned investment in buildings and infrastructure, according to research company Timetric, although it said that for now, the expectation was that the tournament would proceed as planned.

It said that in view of the country’s current situation, with the economy set to contract by 4% in 2015, losing the World Cup would be especially alarming given that the proposed massive investment in buildings and infrastructure to host the tournament would provide a major source of growth for the construction industry and the economy in general.

In the fallout to the recent controversy surrounding football’s governing body, FIFA, Russia has denied any wrongdoing in its bidding process, although FIFA officials have said that the country could lose the right to hold the tournament if evidence of bribery became apparent.

Sina Zavertha, economist at Timetric’s Construction Intelligence Center, said, “The prestige that comes with hosting a World Cup is one key factor, but there is also the expected economic boost that entices countries to spend sizeable sums in their efforts to be awarded hosting rights.

“It is now estimated that the total cost of the tournament in Russia is US$11.6 billion (€10.44 billion), compared to the initial US$22 billion (€19.81 billion). The construction industry, in particular, thrives in the years prior to the events, as stadiums and leisure infrastructure, as well as transport infrastructure, are built and upgraded.”

She said the authorities had started to rationalise plans for hosting the World Cup as a result of the deterioration in the country’s economy, deciding to focus on the fulfilment the FIFA’s minimum requirements.

It was agreed, she said, to reduce the number of new stadiums to be built to 10. Then FIFA accepted, at the end of 2014, a change to the number of planned training complexes to be constructed or modernised – from 48 to 37 – and the replacement of the training complex in Nizhniy Novgorod with a similar objective in Rostov-on-Don.

Zavertha felt the decision of the authorities to focus on FIFA’s minimum requirements would help the organisers in the preparations for the World Cup tournament.

“However, in view of delays and cost overruns that plagued preparations for the Sochi Winter Olympic Games in 2014, it is unlikely that preparations for the World Cup will run smoothly,” she warned.

“This is not least because of the more troubled economic environment due to factors such as falling oil prices, a devalued Ruble, and targeted Western sanctions in response to Russia’s annexation of Crimea.”

Sustainability

With the Preliminary Draw for the tournament to be held on 25 July 2015 in St Petersburg, the 2018 Sustainability Strategy was approved at a meeting of the Russia 2018 Local Organising Committee (LOC) Management Board last month in the city of Samara.

The strategy sets out the main goals and principles for the sustainable management and operations of the FIFA World Cup. The strategy is scheduled to be launched on 23 July in St Petersburg.

Delegates to the meeting visited the building site for the new stadium in Samara, where the foundations were being laid.

The visitors also saw the new passenger terminal at Kurumoch Airport, which began operating this February. Kurumoch International Airport is the largest airport in the Volga Region. Some 46 airlines operate regular services to over 90 destinations from Samara.

Russia 2018 LOC chairman Vitaly Mutko said, “We as a host country continue to fulfil our obligations to prepare all the events and projects of 2018 FIFA World Cup in time, we are well on track and on schedule.”