A.N. Rybalko Sochi-2014: the financial side of olympic medal
Sochi-2014: the financial side of olympic medal
A.N. Rybalko,
аспирант, Сургутский государственный университет (628400, Россия, Тюменская область, ХМАО-Югра, г.Сургут, ул.Ленина, д.1; e-mail: Nastya-surgut@yandex.ru)
Аннотация. В данной статье рассмотрено финансирование Олимпиады Сочи-2014, источники финансирования и основные инвесторы, объекты инвестирования. Представлены особые экономические зоны России, рассмотрено их финансирование.
Abstract. In this article the financing of the Olympics Sochi-2014, sources of funding and the main investors, the investment objects are considered. Special economic zones of Russia are presented, their financing is concerned.
Ключевые слова: город Сочи, инвестиции в Сочи, Олимпиада в Сочи, финансирование Сочи, Олимпиада 2014, свободные экономические зоны, особые экономические зоны.
Keywords: city of Sochi, investment in the Sochi Olympic Games, financing Sochi Olympics 2014, free economic zones, special economic zones.
The relevancy of the research is confirmed to be held in 2014 by Olympic games in Sochi, the economic effect of which will be for many years to come, and, in General, active development of tourist destinations in the South of Russia. This region of the South of Russia is attractive for both national and foreign investors: on October, 14, 2010 the government of the Russian Federation formed a new Tourist cluster in the North Caucasus Federal district, Krasnodarskij Krai and Adygea Republic. And in accordance with the state program of development till 2025, the budgetary allocations of the Federal budget in 2013-2020 are 234,9 billion [1].
Also the question about the formation of a special economic zone (equal - free economic zone, hereinafter - SEZ) in the territory of Sochi has been relevant for a long time, which hosted the 0lympics-2014, or in one of its segments -Krasnaya Polyana [2]. But, creation of SEZ in these areas has not happened. However, we note that the most successful foreign businesses are developing in the SEZ, and especially important - in the field of tourism. Currently in Russia there are 28 special economic zones, which are divided into four types [3] (see Illustration 1):
Location of 28 special economic zones
Industrial and production zones ^^ Tourist and recreational zones
Technology and innovation zones
Port zones
nsk Region I Samara Reg
Republic of Tatarstan
Republic of Tatarstan
Sverdlovsk Reg
Pskov Régi ion
Moscow Re* Dubna lion I
Moscow Zelenograd
Khabarovsk Reg
I
Kaluga Reg ion
Chechen Republic
Ski claster
The Republic of Ingushetia
Krasnodar Region The Republic of Kabardino-Balkaria The Republic of Dagestan
The Republic of Adygeya The Republic of Karachaeva-Cherkessia The Republic of Osetiya
Fig. 1. Special economic zones of Russia/ Source: [3]
Экономика и предпринимательство, № 5 (ч.2), 2014 г.
393
МЕЗОЭКОНОМMКА
In Russia there is the greatest number of free economic zones of tourist-recreational type - 14. There was a trend of significant increase in the number of foreign investors in SEZ of Russia [4]. By 2013, there were over 300 (see Illustration 2).
350
300
250
200
150
100
306
318
-329-
257
~20T~
143
12 53
2006 2007 2008 2009 2010 2011 2012 2013
Fia. 2. The number of residents of special economic zones of Russia.
Source: [3,4].
In the tourist-recreational zone is concentrated 39 investors, and it is on the third place by the number of investors among all types of SEZ. The greatest number of investors is concentrated in technical-promotional zone - 214, on the second place - industrial-production zone (concentrated 71 investors). The smallest number is located in the port area - 5 investors [4].
The increasing number of investors determines an increasing in the volume of investments in the SEZ. Therefore, it is also advisable to consider the dynamics of the investment volume. Considering the key indicators of the functioning of the Russia's SEZ, we note for 2006-2013, the trend of considerable increase of volume of investments into them as from Federal sources, and investors-residents (Russian and foreign), and the volume of revenues from investors-residents exceeds the volume of revenues from Federal sources, significant growth was recorded in 2010-2013 (see illustration 3), the volume of investments in 2013 (compared to 2010) has increased by 46 635 million rubles, or 40%, indicating the increase of investment attractiveness of investment objects and a growing number of investors, both domestic and foreign, in the SEZ of Russia in 2013 (see figure 3).
Mln. RUB
90000,0 80000,0
The key figures of SEZ's efficiency
More than 60 bin. RUB invested in infrastructure
2006
2007
2008
2009
2010
2011
2012
2013
Fig. 3. Investment in Russia's Special economic zones. Source: [3, 4].
Let us consider the interest of investors and financial flows conducted due to holding of the Olympic games Sochi-2014.
0lympics-2014 was held in two locations -the mountain and coastal clusters. The coastal clus-
ter is "Olympic Park" and is located at 265 hectares in the Imeretinskaya valley. The author made the Table 1, which provides data on the sports facilities and costs [5, 1].
Sports Olympic objects of Sochi-2014
Table 1
Name of the object The cost of the object 1. Responsible Contractor
The mountain cluster
The Olympic stadium "Fisht" $778 million State Corporation "Olympstroy"
The Large Ice Palace "Big" $300 million State Corporation "Olympstroy"
The Ice Arena "Puck" $35,5 million State Corporation "Olympstroy"
The Curling Center "Ice cube" $55 million LLC "Investment and construction company "Slavoblast"
The Skating center "Adler-arena" $33 million JSC "Center for technology transfer of the construction complex of Krasnodar reqion "Omega"
The Winter Palace Of Sports "Iceberg" $75 million State Corporation "Olympstroy"
The coastal cluster
The complex of competitions on ski races and biathlon "Laura" $15 million JSC Gazprom
The Extreme Park "Rosa Khutor" $400 million LLC "Company development ski resort Rosa Khutor
The Centre Luge "sledge" $130 million State Corporation "Olympstroy"
The Complex for jumping "Coaster" $245 million JSC Krasnaya Polyana
Total: $2066,5 million
Journal of Economy and entrepreneurship, Vol. 8, Nom. 5-2
A.N. Rybalko Sochi-2014: the financial side of Olympic medal
Total spending on the Olympics in Sochi was 1526 billion roubles and in terms of expenditure it is the most expensive Olympics in the history of the games [6]. Table 2 presents comparable costs for the Olympics, starting with 2004 [7].
Table 2
Olympic costs to host the Olympics in 1988 and 2014
Year Number City (Country) Planned expenditures, $ billion Actual expenditures, $ billion
2004 XXVIII summer Athens (Greece) 4,65 13,50
2006 XX winter Turin (Italy) 2,40 4,37
2008 XXIX summer Beijing (China) 16,30 43,19
2010 XXI winter Vancouver (Canada) 2,88 6,08
2012 XXX summer London (England) 3,93 15,39
2014 XXII winter Sochi (Russia) 13,10 50,90
Source: [7].
Announced in early autumn, 2013 by President of Russia Vladimir Putin and confirmed in January, 2014 by Vice-Premier in charge of the preparations for the winter games D.Kozak the total budget allocated for the construction of all Olympic objects and the Olympic and Paralympic games 2014 in Sochi amounted to 214 billion (without cost of infrastructure). This amount is the sum of the budgets for the construction of Olympic facilities and direct holding of the games. According to President Putin: "100 billion rubles of this money is net public funding, and 114 billion will be allocated at the expense of investors". The amount of 214 billion rubles (on erection of objects) constitutes 20% of the total planned volume of investment. The remaining 80% of all the funds - investment into infrastructure of Sochi [8].
The final amount of financing of Olympic objects' construction and Sochi necessary infrastructure is 1,526 trillion rubles (about 51 billion dollars). Including the state Corporation "Olympstroy" invested 174,9 billion rubles, investors - to 1.005 trillion rubles, the administration of Krasnodar region and Sochi - 109 billion roubles, the Federal authorities -237 billion rubles [9]. Thus, investors make up the largest share in the structure of financing the Olympics. Note that the biggest creditor to the preparation for the Olympic games in Sochi is the state Corporation "Vnesheconombank", issued responsible contractors (see Table 1) the Olympic loans in the amount of 240 billion rubles [9]. Let us consider the main investors and their contribution to the Olympics:
1. State Corporations [9]:
JSC RZD (260 billion rubles), JSC Gazprom (180 billion rubles), JSC Sberbank of Russia (40 billion rubles), JSC FGC UES (20,8 billion rubles), the Oil Company Rosneft (5 billion rubles);
2. Private holding companies-investors:
Basic Element (90 billion rubles) [10],
Interros (68,6 billion rubles) [9], UMMC holding (3,5 billion rubles - complex "Washer") [9], LUKOIL (not announced);
3. Partners:
• World: Coca-Cola, Atos S.A., Dow Chemical, General Electric, McDonald's, Omega, Panasonic, Procter&Gamble, Samsung, VISA;
• National: Aeroflot, Bosco, Megafon, Russian Railways, Rosneft, Rostelecom, Sberbank, Volkswagen Group Rus;
• Partners: Ingosstrakh,
PricewaterhouseCoopers, Sportloto.
4. Official suppliers:
Adamas, Power Technologies, Education First, EXECT Business Training, The publishing house "Kommersant", brewing company "Baltika", Avaya.
According to the global network of agencies Havas Sports-and-Entertainment Group (HSE), taking from analysis of the results of the London Olympics 2012, the image of the companies - Olympic sponsors on average improved by 25-50%. Strengthening positive attitude towards the brand is often transformed into a significantly higher probability of purchase [3].
For Russia the holding of the Games i
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