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SBD Global/June 28, 2013/Olympics

Sochi 2014's Dmitry Chernyshenko Talks About Games' Impact On Region, High Costs

Dmitry Chernyshenko
The sporting world will turn its eyes to a Black Sea resort city with a population of about 400,000 next Feburary to watch the the 22nd Winter Olympics. For about two weeks, the world's best winter sports athletes will compete for glory and gold in Sochi, Russia. Sochi 2014 Organizing Committee President & CEO DMITRY CHERNYSHENKO talked to SBD Global about the Games' impact on the region, its high costs and weather concerns.
 
Q: Russia will host its first Olympic Winter Games next February. What are your expectations for the Sochi Games?
Dmitry Chernyshenko: I’m extremely proud of our achievements to date to bring the Winter Games to Russia for the first time ever. In terms of expectations, there is no doubt that the Games will put Sochi on the map. The city of Sochi has always been a very popular tourist destination in Russia. And yet, few people in other parts of the world have heard of Sochi before it got the right to host the Games. We can expect that, by hosting the Olympics, Sochi will benefit from important infrastructure development that will lead to long-term growth. It can also provide improved quality of life to the region, competitiveness on the world stage, and long-term economic gain. In fact, we are already seeing the proof of it with unemployment rate the lowest in Russia: below 1 percent. Last year, Russia's Forbes magazine named Sochi the best city for doing business in Russia. The Games will bring forth a new image of Russia to the world. We’ve been completely focused on what the Games will leave behind after two weeks of sporting competition. The Games are giving us opportunities to launch lasting initiatives that would have taken years to create otherwise. And we believe there is change already taking place, not just roads and facilities, but a new interest and approach to volunteering, new environmental building standards, greater awareness and support for those with disabilities and a passion for winter sports.

Q: Unseasonably warm temperatures forced you to store 450,000 cubic meters of snow. How concerned are you that there will be a snow shortage in February?
Chernyshenko: While the common image associated with Sochi is that of a summer sea resort, the Caucasus Mountains that lie next to the city offer excellent conditions for winter sports. Although we are expecting perfect weather conditions for winter sports in 2014, we know that the weather can be unpredictable and are getting ready for any surprises. With this in mind, we are doing everything necessary to ensure there will be enough snow, whatever the weather. During the recent test events, we have been able to successfully test our innovative Guaranteed Snow Programme for the first time. It provides for the collection of natural and artificial snow in the winter seasons preceding the Games, preservation of the snow with special technology, transportation of the snow if necessary and production of the required amount of snow in negative and positive temperatures. The storage areas are set in the immediate vicinity of the courses so that the snow can be supplied with snowcats. Collectively, these measures should guarantee the availability of snow in the case of any changes in weather conditions.

Q: In early February Russian President Vladimir Putin voiced his anger about Sochi’s cost overrun. Reports suggest that the current price tag for the Games is $51 billion. What’s the reason for those high costs? And why do the costs of facilities such as the ski jumping venue soar from a reported $40 million to $265 million?
Chernyshenko: It is important to note that there are two, separate, clearly outlined budgets when considering the construction and staging of the Games. Organizing the 2014 Olympic and Paralympic Winter Games in Sochi is about 70 billion rubles ($2.1B). Finance comes through a combination of the already highly successful Sochi 2014 Organizing Committee marketing program and guaranteed state funding. Eighty percent comes from the marketing program, that is private sources. Outside our budget there is a significant investment being made in the infrastructure of the entire region, which is transforming the area and will bring huge social and economic benefits for generations. Olympic construction and construction of related infrastructure makes up to approximately 200 billion rubles ($6.1B); 60 percent of it comes from private investors.

Q: Are you expecting to cover the costs of staging the Sochi Games through ticket sales, sponsorship deals and revenue from merchandising and licensing, or are you calculating with a loss?
Chernyshenko: As mentioned previously, finance comes through a combination of the already highly successful Sochi 2014 Organizing Committee marketing program and guaranteed state funding. The Sochi 2014 Organizing Committee has attracted almost 1.3 billion dollars in financial investments through our marketing program. This is 1.5 times greater than the earnings of the Vancouver Games Organizing Committee throughout its entire existence. So, we can already say that the Sochi 2014 Organizing Committee has become the most successful Winter Games Organizing Committee in the history of the Olympic movement.

Q: Besides national pride, what will Russia as a whole and Sochi as the host city gain from hosting the 2014 Winter Games? Is it worth the billions of dollars in construction and other costs?
Chernyshenko: The Games are about much more than two weeks of sport, they are a catalyst for positive social, economic and environmental change. As I’ve mentioned previously, the Games are turning Sochi from a regional, summer resort into a year-round, business and tourist world-class center. But not only! The Games are driving innovation and change! For example, for the first time in Russian history, we’ve introduced "green" standards into construction. These didn’t exist before and will last. The Games are also a catalyst for Russia’s new spirit of volunteerism. We started practically from zero, now Russia is acknowledged as one of the leaders in volunteer movement. Sochi is becoming a model barrier-free environment for all Russian cities to emulate. We are not going to neglect the post-Games period and the legacy of it. We want to deliver the best Games, but we also want these benefits to last for generations to come.

Q: With only eight months left until the opening ceremony, what’s the most important issue on your agenda?
Chernyshenko: We have completed our international test event program -- and we’ve hosted more tests than any other Games. The test events of the 2012-2013 season broke records in terms of the number of people involved: nearly 3,300 athletes, over 2,600 accompanying and support staff, over 5,000 volunteers, over 1,200 representatives of TV broadcasters, over 1,500 representatives of the media and about 130,000 spectators. We have been lauded by the athletes' praise for the venues and facilities, with the success of the events thanks to the hard work of our Sochi 2014 team and dedicated volunteers. Just last month at Sport Accord, in St. Petersburg, we unveiled the medals for the 2014 Winter Olympics. The Olympic medals feature a unique "patchwork quilt" design that represents the different regions of Russia and were very well received by the international community. Now, we are fully focused on the Torch Relay launch which will take place this fall. We are planning an incredible Torch Relay which will be one of the longest in both time and distance in Olympic history -- lasting for 123 days and covering over 65,000 km -- in fact, it will be longer than the Earth's equator!
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