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Volume 6 No. 197


A project to build a state-of-the-art football arena on the Neva River in St. Petersburg "stands to be scrutinized by auditors as part of a high-level inquiry into why it has repeatedly and drastically exceeded its budget," according to Anna Kordunsky of the N.Y. TIMES. The stadium was "envisioned as a jewel of Russia's stadiums when the nation holds the World Cup in '18." The government ordered the audit after football fans "displayed their frustration by heckling St. Petersburg's Governor Georgy Poltavchenko," before a football match. The "public anger is a danger signal for Russia's government, which has earmarked billions of dollars for construction ahead of the World Cup and the 2014 Winter Olympic Games in Sochi." Federal accounts chamber Chair Sergei Stepashin said Friday that "auditors would analyze construction expenses and any new budget increases." The outburst against Poltavchenko "was triggered by a local TV interview in which he said that "football fans were welcome to offer their help in completing construction." The "costs of the tax-financed project have soared since it started in '07." St. Petersburg authorities recently "asked for a further budget increase, pushing the cost to an estimated $1.4B, up from the initial estimate $210M" (N.Y. TIMES, 10/28). Poltavchenko said, "We want to uncover, where 16B ruble ($508M) have already disappeared" (, 10/26).

Canada Pension Plan Investment Board, one of the country's top pension fund managers, outlined "two major investments in the world of professional motor racing," according to Meads & Rocha of REUTERS. CPPIB, known for staid investments in infrastructure projects, shopping centres, private equity firms and the like, said that it had "struck a deal to buy a big stake in motorcycle grand prix organiser Dorna, and was also financing a large chunk of a loan to Formula One Group." The pension fund manager said that "it had signed an agreement to acquire a 39% stake" in MotoGP events and the FIM World Superbikes Championship organizer Dorna from private equity firm Bridgepoint. CPPIB did not disclose the purchase price, but a source said it was about €400M ($518M). The stake sale is "another example how large pension funds are buying into businesses alongside private equity houses as they look for better returns from growing companies with good long-term prospects" (REUTERS, 10/26).