Putin's £30bn calamity games: Collapsing buildings. Colossal corruption. Contract killings. The race to complete Russia's Winter Olympic village mired in scandal

Special report from the Olympic Village in Sochi, Russia

Russia is set to host the Winter games next year costing £30billion



Troubles on the site include explosions, mafia killings and corruption

Vladimir Putin flies to London for talks with David Cameron today but the Russian leader could hardly be blamed if his mind was elsewhere.



For amid his many pressing diplomatic, domestic and personal concerns there is one problem – some 2,000 miles away in the Black Sea resort of Sochi – proving more troublesome by the day.

This is the site of Putin’s break-the-bank 2014 Winter Olympics, a grandiose scheme under his personal supervision which many believe is veering dangerously off-piste.

Scroll down for video



Putin's pet project: A sign welcoming visitors to the Black Sea resort of Sochi where Russia will host the 2014 Winter Olympics, a project mired in scandal and corruption

Problems Putin has had to cope with include corruption on an industrial scale, collapsing tunnels, exploding gas pipes, buildings damaged by landslides and a couple of mafia contract killings.

Now there is concern that this ‘personal vanity project’, as his critics call it, is more likely to topple the strongman than any speculation about his private life, or any number of opposition rallies.

Russians are still puzzling over the timing of the announcement of his divorce from wife Lyudmila while one rumour doing the rounds, denied by the Kremlin, is that Putin intends to unveil his new first lady at the Olympic opening in February.



Preparing for the Games: Prime Minister Vladimir Putin and Dmitry Medvedev talk while skiing near Sochi

Whatever the truth about his personal life, and in particular the rumoured relationship with glamorous 30-year-old gold-medal gymnast Alina Kabaeva, it now seems widely accepted that Putin’s future political virility is wedded to the success or failure of Sochi.

Armed police are already positioned every couple of hundreds yards along the snaking highway which rises from this sub-tropical Black Sea resort to the 3,600ft high village built to host alpine events at next year’s winter games.

I was recently forced off the road as Putin’s 23-vehicle black motorcade charged up the mountainside on his latest unannounced inspection of a complex that is far from ready with 236 days to go, and mired in allegations of gargantuan scandal.

So tight is the deadline that the president appears to have concluded that only his personal presence can rescue an Olympics which, at a cost of £32 billion, is already almost four times as expensive as London’s summer games.

More than half of this eye-watering sum has been stolen by corrupt officials and their cronies, according to one deeply troubling report.

In many recent weeks, Putin and his Kremlin court has moved lock, stock and barrel from Moscow to Sochi so he can take personal charge.

When Cameron wanted to see Putin last month, he was told the only possible venue was the Russian leader’s Stalinist retreat in Sochi.

The Kremlin leader took the Prime Minister up in the presidential helicopter that he uses to regularly spy on the patchy progress – and the move meant they avoided the endless snarling traffic jams caused by the manic construction work.

‘Putin is in Sochi so often nowadays we say he has a new lover called Rosa and spends all his time with her,’ joked a manager in one of many new hotels built for the sporting extravaganza.

‘Rosa’ is Rosa Khutor, the purpose-built Disneyesque mountain village under towering Caucasus peaks which will be the centrepiece of the downhill events.

It is part of Europe’s largest building site with more cement lorries per square mile than anywhere on the planet, all engaged in an epic race against time before winter sets in, when everything must be completed if Putin’s wonderland is to amaze the world in February.

As the work has progressed, Sochi’s pristine mountain air has been polluted by the exhaust fumes of trucks, the natural silence regularly interrupted by the din from pile-driving rigs and dynamite.

In the harsh June heat, an army of sullen-faced migrant workers imported from impoverished ex-Soviet republics tramp around the complex’s hundreds of unfinished buildings, roads, rail links, cable car lifts, and stadia.



Collapse: A three-storey apartment building under construction in Sochi left tilting after a vehicular road traffic tunnel being constructed for the 2014 Winter Olympics collapsed nearby

Arch-Putin critic Boris Nemtsov, a former deputy prime minister, has said: ‘We know perfectly well that the timing of finishing the construction is beyond tight, construction quality is terrible, and the work in Sochi is done mostly by the migrant workers from Uzbekistan, Tajikistan and Kyrgyzstan, who are in slave-like conditions.

‘Workers from Inzhtransstroy [a building company] have not received a salary for several months, they are fed with food that even dogs do not want to eat, and they refuse to come to work.

‘Inzhtransstroy, by the way, before 2013 belonged to a friend of Putin, Arkady Rotenberg, who has construction contracts for the Olympics worth more than 200 billion roubles [£4 billion].’

Loyalist Rotenberg is said to have a home in Britain.

Nemtsov says there are other examples of astronomical sums in Olympic business going to wealthy friends of Putin, while ‘the workers are not paid’.

The tens of thousands of migrant workers live in cramped dormitory barracks dotted around the Olympic area. They stretch from the ‘coastal cluster’ centred on Sochi to Rosa Khutor 29 miles.

The migrants accuse ruthless subcontractors of overworking and underpaying them.

‘We want to leave, but we can’t escape home because they owe us money and have taken our passports and other documents,’ complained one.

A Tajik mother of four said: ‘Yesterday I worked 14 hours. It’s like a Siberian labour camp.’

The scale of Putin’s ambition here is awesome as he aims to prove to the world that Russia can put on the greatest-ever Winter Olympics show.

Precarious: David Cameron and Putin look at a model of the main 2014 Winter Olympics stadium during the Prime Minister's visit to Sochi last month

It includes building from scratch an Olympic stadium – which will also be the world’s largest theatre – three Olympic villages, a ski jump, ice hockey arenas, alpine facilities and a cross-country venue.

On top of this, there are new roads, bridges, hotels, train stations, an airport, a revamped port and a power system.

There will be 200 miles of roads, 125 miles of railways and 100 miles of gas pipelines – and a vast store of snow just in case the heavens disobey Putin’s orders for perfect pistes.

Many of the sporting venues seem complete, at least on the outside, not least those with which some 60 British contractors are involved. However, the main Fisht Stadium – designed by British architect Damon Lavelle – is only around 65 per cent complete.

The problems relate more to the mammoth infrastructure work and the impression is of corners being cut: tunnels are collapsing, new gas pipes exploding and landslides undermining new buildings leaving them crooked. Recently it was announced that plans for a new power station – once crucial to the project – have been entirely dropped.

There is a feeling of chaos and brinkmanship. Marriott hotels announced recently that one of its three planned Sochi hotels was on hold, and two others would not be ready by the time of the Olympics, due to ‘circumstances beyond our control’. Soon afterwards – presumably after phone calls were made – they revealed everything was back on track.

Nemtsov is alleging a ‘monstrous scam’. ‘The cost of the Sochi Olympics is beyond imagination: it is 4.2 times more expensive than was planned,’ he said in a report issued recently which compares these overruns with those seen in previous Games.

‘It’s $50 billion [£32 billion] so far, $30 billion [£19 billion] of which wasn’t used to build anything related to the Games but has simply gone to someone else’s pocket, basically stolen.’

Behind the scandal, he says, is ‘an absence of fair competition, clan politics and the strictest censorship about anything related to the Olympic Games.’

There was no tendering process. ‘Only oligarchs and companies close to Putin got rich,’ Nemtsov said.

Mistress: Putin is rumoured to have had an affair with gymnastics champion Alina Kabaeva

‘Almost everything that is related to the cost problems and abuses in preparation for the Olympic Games was carefully concealed and continues to be covered up by the authorities.’

With so much at stake, the president himself is unhappy at the exploding costs and chronic delays.

In February, he publicly upbraided and fired businessman Akhmed Bilalov as vice president of the Russian Olympic Committee over the soaring costs of the ski jump – designed to cost £25 million and now estimated to come in at £168 million.

Bilalov is under investigation for embezzling £1.6 million from the company building the ski jump. Recently he has been seen in London, where his son lives, sparking speculation he may join other exiles from Putin’s Russia.

In an unrelated case, building contractor Valery Morozov claimed asylum in Britain after the Russian authorities failed to act on evidence that a senior Kremlin official demanded a bribe of at least £4 million in exchange for construction contracts for the Winter Olympics.

In 2010 local crime boss Eduard ‘The Carp’ Kakosyan was gunned down in a Sochi cafe, leading to claims of clan warfare over the riches earmarked for the Games.

Many also believe the Godfather-style slaying of 75-year-old mafia king Aslan Usoyan – known as Ded (Grandpa) Khasan or Russia’s Don Corleone – at a Moscow restaurant in January was linked to the carve-up of territory in Sochi.

Even Jean-Claude Killy, the French alpine star who heads the International Olympic Committee’s co-ordination commission for the Sochi games, is fatalistic.

‘I don’t recall an Olympics without corruption,’ he said. ‘It’s not an excuse, obviously, and I’m very sorry about it, but there might be corruption in this country, there was corruption before. I hope we find ways around that.’

Putin ignores the doubters and the bulk of the corruption jibes as he demands more and faster progress on the ground.

He says he is ‘absolutely convinced that everything that needs to be done to prepare for the Olympics will be completed with proper quality and in time.’

But it would not be a complete surprise if new and damaging disclosures emerge on top of the corruption already alleged.

A warning from an interesting source came recently when US-based Professor Nina Khrushcheva suggested the Sochi ski slopes may be the undoing of Putin.

She knows a thing or two about the subject: her great-grandfather Nikita Khrushchev was toppled by his own politburo ‘colleagues’ in 1964.

‘I’m scared to give forecasts, but I don’t have a feeling that Putin will stay much longer than Sochi,’ she said.

Many will scoff, citing Putin’s seemingly iron grip on power, his success (at least partially) in transforming a moribund economy and his continued popular appeal – not to mention an absence of leaders with alternative visions.