[Editor’s introduction: Our Russia correspondent, the journalist Grigory Pasko, recently went on assignment to Sochi, the Black Sea resort city that has been slated to host the 2014 Olympic Winter Games. Sochi, which has always been a favorite vacation spot for Russians, has been declared a priority development zone by the government, and is currently being flooded with money – far from all of which actually gets spent as intended. The opportunities and likelihood for corruption in the Sochi infrastructure projects are unparalleled. Over the next few days, Grigory Pasko is going to offer our readers an exclusive series of direct reports about what’s really going on in Sochi these days.] Part I: Special Operation «Olympiad» By Grigory Pasko, journalist The Sochi airport building is a small one-floor affair, somewhat ghastly looking, not at all designed for spending any length of time in. And don’t even think about accessing the internet – there isn’t any. They announced that my flight would be delayed by seven hours – a perfectly normal occurrence for modern Russian aviation with its motley collection of small-fry airlines that don’t carry any liability whatsoever before passengers for their delays. To make a long story short, in my search for a comfortable place to work on my computer while I waited for my flight, I found myself in the airport’s VIP lounge. There was already a group of businessmen sitting there: they were having a heated discussion about the rosy prospects for business in Sochi. They were speaking loudly and were so engrossed in their conversation that it was impossible not to hear their every word.
And what were they talking about? About the construction of a “cottage settlement” [Russian for “detached unit residential development” – Trans.] somewhere in the Sochi area.“It’s like this”, said one. “With the local administration, the question has been solved. We’re going to have to conduct a presentation of the project before the community.”“Where are the builders going to live?”, asked the second.“We’ll build a dormitory. With this there won’t be problems. All the more so because we’re not the only ones who’ll find ourselves in such a situation. Over a hundred thousand workers are going to be working on the construction of Olympic facilities.”Then the conversationalists went off someplace.Sochi’s current airport looks more like a modest strip mall than the gateway to Russia’s hottest resort region.There were lots of advertising booklets in the lounge. I leafed through them. Here’s one Moscow company offering an “elite house in the center of Sochi”. Ready for occupancy in the 4th quarter of 2007. Another company is offering a club residential complex – also in the center of Sochi, with beaches, swimming pools, car parking facilities, and restaurants. Occupancy – 2nd quarter of 2008.Yet another company is offering a cottage settlement with all the VIP infrastructure bells and whistles: pools, fitness centers, boutiques, restaurants, berths for yachts… Occupancy – 3rd quarter of 2008.And I’m sure they’ll build them on schedule. Because this is not for swindled investors in apartment building construction cooperatives, whose houses without any pools and boutiques can’t get built during the course of six-seven years all over Russia.Because all of this is for a different sort of people. In one of the advertising booklets it even says as much: “At the present time, this place of fairy-tale beauty has caught the fancy of the powerful of this world… The residence of the head of the Russian state, …the selection of the city as the capital of the winter Olympiad of the year 2014 elevates the prestige of Sochi in the eyes of the inhabitants of the country and foreign guests”.This is not the first time that Sochi is experiencing a boom of construction and the raising of the capital of rich people. After the end of the Caucasian War in the year 1864, the process of carving up the lands went quickly on the Black Sea coast. The development of the region took place on the basis of private capital. The Russian bourgeoisie, in its turn, felt an advantage from this region. Here arose new opportunities for the application of capital, expanding their incomes.Apparently, today a new era of development of the resort zone by new Russian plutocrats has come.And so, we’re in Sochi – the capital of the winter Olympiad of the year 2014.You feel instantly that the climate here is different: in Moscow, it was 7 below zero Celsius; in Sochi – 17 degrees above. Palm trees and fruit trees with apples, cherry plums, and persimmons. People in light clothing. And far off in the distance, you can see the snow-capped peaks of the Caucasus range.The Sochi coast of the Black Sea, as the tourist prospectuses assert, is the warmest place in Russia. The Black Sea, the only subtropics in Russia – there is no place in Russia that by its natural conditions could compare with it even in the slightest degree.What a Soviet town…Halfway from the airport to the hotel, on Kurortny prospekt [Resort Avenue], there’s a huge traffic jam. The taxi driver curses and explains: such traffic jams appeared right after the departure of the International Olympic Committee. It’s as if though they left, while those who decided to line their pockets on the Olympiad stayed.The abundance of billboards leaps out at you. They offer housing in Sochi and vicinity, as well as summoning to vote for the party «United Russia». There are practically no calls for other parties. Once, someplace, a billboard flashed past with the physiognomy of the leader of the LDPR. It’s strange that «A Just Russia» wasn’t anywhere to be seen. Standing out particularly are billboards with the inscription “Putin’s Plan, Tkachev’s plan”. Tkachev is the governor of Krasnodar Kray, of which Sochi is a part. I was forced to see this personage daily on the local television channels: here he is with a shovel cleaning up crude oil from the shores of the Kerch Strait, there he is conducting a meeting with officials, and now he’s handing out presents to collective farmers and schoolchildren… A local mini-Putin, in other words.“Putin’s Plan, Tkachev’s plan” billboard by the new airport, under construction for 15 years already, promises to increase the number of vacationers in the region 1.5 times by 2010, even though Sochi seems incapable of handling the number it already has.The hotel in which I stayed was built in 2004. Despite this, it turned out that it didn’t have any access to the internet, although they had assured on the phone that it’s no problem to get connected. Later, it turned out that there’s a problem with the internet in Sochi in general. It seems like there’s barely one internet café for the whole city.In general, the service in this resort city left a very Soviet impression. In the city cafés, the food is amazingly untasty. The service? – based on the principle of “you’re not going to find anything better, and you know it, and so do we”. Customers – and this is obvious – are not held in high esteem. Most likely, this is the result of the huge quantity of holidaymakers in the resort season. There are many of them, and few cafés. So the vacationers are happy to get any kind of service at all. Maybe the upcoming Olympiad will change the mentality of the service personnel at the hotels and cafés? Krasnaya Polyana and other Olympic placesYou can see the building of the new airport from afar as you drive along the road to the downhill-skiing resort of Krasnaya Polyana. It was under construction, as they say, for 15 years. And only with acquisition into the assets of Oleg Deripaska’s «Basic Element» did things finally start moving from a total standstill. But it’s still a long way to the opening of the new airport.The road to the mountains actually isn’t even half bad. New tunnels have been built. Hotels are being built. «Gazprom» is building its own cottage town not far from the ski resort. We drove up to it, and I even managed to take two photographs before the armed security guards rushed out and demanded that I cease and desist: “Only with the permission of the brass!” But the brass are in Moscow. The place for the settlement has been chosen well: near a mountain stream, a beautiful view of the mountains, there’s already a road…The residential community being built by «Gazprom» (photo by Grigory Pasko)Local resident Albert told me that one of the promises made by «Gazprom» was to provide gas service to the settlements of Moldovka and Nizhnevysokoye… [which means Lower Upper in Russian—Trans.] And the years went by, but the people never did see the gas. So does that mean that «Gazprom» didn’t keep its promise? (Here I recalled the situation with gas service in the town of Babayevo in Vologda Oblast. There too, Gazprom had promised a lot, including to install gas service in the town and the surrounding Rayon, but had not fulfilled its promises). No doubt there’s a multitude of such examples all over Russia, which just confirms yet again the opinion that such corporations are not created for Russia and Russians, but for a narrow circle of people working for their own benefit.In the vicinity of the mountain Maly Akhun along the sea stand cottages, which, I was told by local inhabitants, are officially categorized as covered berths for motorboats. In actuality, these are full-fledged houses with apartments that are leased out to renters. It is understood that the owner of these apartments is going to get seriously burned. There, in the vicinity of Maly Akhun, they’re going to build an artificial island – a miracle that is already being brought into reality in the United Arab Emirates. Recently, Krasnodar Kray and Sochi were visited by an official delegation from the largest company in the UAE – Damac. Earlier, representatives of this company had already expressed readiness to invest no less than 200 million dollars in the economy of the Kuban. Now they were interested in the opportunities for construction of Olympic facilities – hotel complexes, yacht marinas and skyscrapers.“Covered berths for motorboats” at Maly Akhun (photo by Grigory Pasko)But the group of companies«M-INDUSTRIYA», as they write in the newspapers, has already begun construction of the artificial «Island of the Federation». The overall area of the complex will comprise 250 hectares, of which the built-up area will be 700 000 sq. meters. The proposed volume of investments will comprise 155 bln. rubles.But for now, I didn’t see any construction going on in this area. I only saw people who are waiting for the demolition of these “boatsheds”.However, in nearby Khosta, they’ve already torn down a seven-story hotel that had just been built. On the photo, you can see what’s left of it: a pile of rubble. What’s this all about? Well, the authorities supposedly had not given permission for its construction. And there is a multitude of such «squatter settlements» along the whole territory of the Sochi region.Demolished unauthorized hotel in Khosta (photo by Grigory Pasko)