Developing and Managing the Sochi Facilities
As athletes arrive from around the world and 3 billion people gather at their televisions, all eyes are on Sochi. While the Games reward excellence in athleticism, our focus is on the Olympic size feat of developing the Sochi venue. Though our customers may not have staged such a globally sized event, many of them can relate to the factors affecting the development of Sochi, including changes in management, deadlines, technological requirements, and budgetary fluctuations.
The International Olympic Committee awarded the 2014 Winter Olympics bid to Russia in July of 2007. In less than 7 years, Russia developed the Black Sea resort town of Sochi to cater to the influx of over 7,000 athletes, 25,000 volunteers, 37,000 security officers, and the tens of thousands of tourists coming to view the Games. They would not only need to build sport facilities but also provide the supporting infrastructure to make the Games possible.
Previous bids to have the games in Sochi failed, due largely to the necessary infrastructure to bring people from the coast into the mountains. This obstacle was overcome with a combination highway link and rail line for the 2014 Games. In total Sochi consists of 11 Olympic venues and a variety of support facilities, such as the Olympic Village and a broadcasting center. Below are some cost estimates for these developments, sited in the February 2014 Vanity Fair article, “Putin’s Run for Gold.”
- Bolshoy Ice Dome $302.9 Million
- Coastal Olympic Village – $778 million
- Rail-Highway Link – $9.4 billion
- Iceberg Skating Rink – $277.7 million
- Fisht Olympic Stadium – $778.7 million
- Russki Gorki Jumping Center – $265 million
- Rosa Khutor Resort – $2.6 billion
The Budget – or lack therof…
Costs added up rapidly with the construction of new ski runs, indoor skating rinks, stadiums, ice domes, and arenas. The construction and renovation is expected to cost upwards of $50 billion US dollars, making the Sochi Olympic the most expensive Olympic Games ever, beating out Beijing’s budget of $40 billion for the 2008 games. The previous winter Olympics in Vancouver cost approximately $7 billion to mount.
How did Sochi spend so much money? A variety of factors contributed to their out of this world Olympic price tag and to a certain degree, many of these factors are also what face facility managers today.
- Construction & Deadlines – Huge construction costs, kickbacks to construction companies, and continual changes in management caused the Sochi budget to quickly escalate and fall behind schedule. The state run construction authority, called the Olympstroy, has gone through four directors in six years and is being investigated for several misuses of funds.
- Technology – Most facilities managers are familiar with the expectation of Wi-Fi accessibility in new facilities and with that comes the need for data security. Recent reports have revealed that the public wireless networks in Moscow leave users open to malware and transmitting personal data. Visitors to the Games have been advised to avoid public wireless networks. There are also the demands of the press, for which the Sochi developers created the 75,000 square foot International Broadcasting Centre.
- Geography & Security – The difficulties of building winter facilities in Sochi’s mountains along with the highway and rail link from the coast added significantly to the price tag for the Games. In addition, the need for extremely tight security to prevent possible terrorist attacks serve as a reminder that Sochi is geographically proximate to much unrest.
Planning for the Future
Following in the footsteps of many Olympic host cities, Sochi hopes to drive up tourism and make Sochi a tourist destination. Facility management and capital planning will be key in making these new constructions last. They will need to be diligent about keeping every facility operational and providing all facilities with the necessary maintenance. Though we know the venue cost $50 Billion to develop, the real question for Russia is what will it cost to maintain when the games are over?