China to build Russian World Cup stadia
China to build Russian World Cup stadia
We’re saying at least one, maybe more, and here’s why.
To honour its commitment to Fifa Russia must build and commission seven brand new stadia in under three and a half years. (Russia promised 12 stadia for 2018: three are already built and two others are being renovated.)
The projects are behind schedule. In March last year, sports minister Vitaliy Mutko raised the alarm, complaining of problems and broken deadlines “in every region.” The very site of one stadium, in Kaliningrad, was settled only last month.
At the same time, costs have spiralled. Even before Russia’s severe economic woes brought on by sanctions and the plummeting price of oil, 2018 was set to be the most expensive World Cup in history.
Now costs will surge even higher. Inflation will be one cause of this. Also, the devalued rouble can buy less materials, goods and services from abroad.
More critical is the fact that sanctions and the massive hike in interest rates to 17% late last year makes financing operations extremely expensive for contractors, and they will need to pass that cost on to the client, the Russian government, through higher contract prices. Prior to the interest-rate hike we saw a builder hold out for more money, and he was a powerful friend of President Putin. The contractors know they’ve got the government over a barrel.
The president is caught between a rock and a hard place. Having burned through more than $120bn in precious foreign currency reserves last year in propping up banks, state companies and protecting the rouble, he can ill afford a blank-cheque World Cup. But nor can he cancel the tournament without a massive loss of face.
We could see the World Cup building programme being brought under sudden state control, with stadia built by fiat and construction bosses purged or arrested. A similar fate befell Russia’s troubledspaceport project.
But another possibility is that Putin may teach his recalcitrant builders a lesson and invite Chinese state-owned firms in to build some of the stadia. They have plenty of experience, cash, and appetite for risk – and China may welcome the opportunity further to bind its new energy-rich, credit-starved friend to itself.
จีนได้งานสร้างสนามกีฬา บอลโลกที่รัสเซีย
China to build Russian World Cup stadia
We’re saying at least one, maybe more, and here’s why.
To honour its commitment to Fifa Russia must build and commission seven brand new stadia in under three and a half years. (Russia promised 12 stadia for 2018: three are already built and two others are being renovated.)
The projects are behind schedule. In March last year, sports minister Vitaliy Mutko raised the alarm, complaining of problems and broken deadlines “in every region.” The very site of one stadium, in Kaliningrad, was settled only last month.
At the same time, costs have spiralled. Even before Russia’s severe economic woes brought on by sanctions and the plummeting price of oil, 2018 was set to be the most expensive World Cup in history.
Now costs will surge even higher. Inflation will be one cause of this. Also, the devalued rouble can buy less materials, goods and services from abroad.
More critical is the fact that sanctions and the massive hike in interest rates to 17% late last year makes financing operations extremely expensive for contractors, and they will need to pass that cost on to the client, the Russian government, through higher contract prices. Prior to the interest-rate hike we saw a builder hold out for more money, and he was a powerful friend of President Putin. The contractors know they’ve got the government over a barrel.
The president is caught between a rock and a hard place. Having burned through more than $120bn in precious foreign currency reserves last year in propping up banks, state companies and protecting the rouble, he can ill afford a blank-cheque World Cup. But nor can he cancel the tournament without a massive loss of face.
We could see the World Cup building programme being brought under sudden state control, with stadia built by fiat and construction bosses purged or arrested. A similar fate befell Russia’s troubledspaceport project.
But another possibility is that Putin may teach his recalcitrant builders a lesson and invite Chinese state-owned firms in to build some of the stadia. They have plenty of experience, cash, and appetite for risk – and China may welcome the opportunity further to bind its new energy-rich, credit-starved friend to itself.