World Cup 2018: 12 stadiums finished, 108 in the ether

The preparation for the World Cup 2018 is going on in Russia. A vast volume of work is to be fulfilled, which is being complicated by a far-from-ideal economic situation. However, the tasks have been set and they are to be fulfilled. Russia will do its best, and the Olympiad in Sochi is proof of this. 

First money, then football

On June 20^th, 2013, the Russian Prime Minister, Dmitry Medvedev, signed the government decree, “On the preparations for holding the World Cup Football Championship in Russia in 2018”. It includes the main events and their predicted cost to the federal budget, regional budgets and investors.  

The cost of the program’s implementation totals 664.1 bln roubles, including 336.2 bln roubles from the federal budget, 101.6 bln roubles from the regional budgets, and 226.3 bln roubles to be drawn from non-budgetary sources. This was to be spent on the construction and reconstruction of 12 stadiums in 11 Russian cities including Moscow, Saint Petersburg, Ekaterinburg, Sochi, Kazan, Nizhny Novgorod, Samara, Rostov-on-Don, Kaliningrad, Volgograd, and Saransk.

But this is only the tip of the iceberg. In fact, while preparing for the World Cup 2018, 108 stadiums with a capacity of 3,000—5,000 spectators will be built. These sports facilities are for exercise and training. Besides this, a number of old sports arenas will be reconstructed. It was planned that 177 bln roubles would be spent on the construction of stadiums, 120.9 bln roubles of which would be federal money.

But it is not only sports infrastructure which is to be created. The program includes the construction of 60 new hotels, and if the construction of sports facilities is being financed mainly by the public purse, hotels are to be constructed at the expense of private investors. 

Besides this, a number of medical centers are to be repaired for use of foreign guests.

It is interesting that in the process of preliminary calculations, the regions claimed twice as much money as the initial sum. 917 bln roubles was requested. If we add probable investments from natural monopolies, the total sum surpasses 2 trn roubles. The host cities of the World Cup, as well as leading state companies, wanted to use the event to get additional money for their development.

Key matches and stadium capacities

But, alas, life intruded on these overly optimistic plans. The World Cup budget has been cut several times already.  In April the RF Government took a decision on the expenditure cut: from 620,865.9 m to 617,167.6 m roubles. According to the Minister for Sport, Vitaly Mutko, the budget reduction does not affect the construction of stadiums and infrastructure – the money connected with the organizational aspect of the championship will be reduced.   

 

Who pays for the banquet?

As soon as it became known that the World Cup would take place in Russia, there arose the question of if the expenses would be recouped. It is a good thing that a third of all expenses are to be taken from non-budgetary sources.  

To remind you, 98% of the 1980 Olympics expenses were from the state budget of the USSR, and 70% of the money spent on the 1984 Olympics in Los Angeles were private investments. World experience shows that the larger the private investments in such events, the higher the payback.  

According to statistical research, during a World Cup, 57% of tourists come to the host country to watch the matches, whilst the other 43% have other objectives. Thus, the Football World Cup is a good booster for tourism and the corresponding infrastructural development, which can be maintained after the championship.   

It may sound odd, but the principal expenses for the World Cup are not so much connected with the construction of stadiums but with social objects. The International Federation of Association Football (FIFA), as well as the IOC, specify strict requirements for the host cities regarding the ‘friendliness’ of the urban environment: the development of transport infrastructure, hotels, drug stores, cafes, restaurants, etc. 

Oh, Samara - stadium…

On October 8^th, 2015, FIFA published the official list of the stadiums where the matches will take place. Only one of them – Moscow’s “Otkrytiye Arena”, the home stadium of Moscow Spartak - is operational now. The others are under construction.

 

Photo: The Samara Arena stadium construction, February, 2016

 

In April, 2016, the FIFA inspectors visited Russia to check on the preparation of the stadiums for 2018. On the whole, the officials were satisfied with the course of the work.

It should be remarked that the construction began badly: for example, the location of the Ekaterinburg Arena in the Urals had been discussed for two years.

The Samara Arena first was supposed to be erected in the Samarka River valley, but then the location was moved to the other end of the city. Besides this, the construction process was delayed because of a conflict with the residents of nearby houses who were to be resettled. But these are not all of the problems the Samara stadium has: it has become known recently that its construction is at risk of failure. The contractor (PSO “Kazan”) has demanded an increase in the estimated price. According to the company directors, it is impossible to build such a big sports facility for the initial 13 bln rouble price.

As a result, the regional government had to change contractors, but there is some doubt as to whether the new company will meet the cost.  

The Samara stadium is one of the largest objects of World Cup 2018: its area and volume are much larger than the other stadiums, even the large ones such as Kazan Arena and Moscow Luzniki. Many experts have remarked upon the unjustified scope of the object and think that the initial cost was too low. “The stadium project turned out a third bigger than other similar sports facilities, and it ate up over 20 bln roubles. More than 40% of its area is meant for commercial use. There are a lot of potential solutions. Now, a reduction of the project is being considered”, Alexander Khinstein, Deputy of the State Duma, said at a press conference in Samara at the end of April. His claim about “multibillion rouble corruption in the Samara region” before the FIFA delegation’s visit to Samara caused a conspicuous scandal. “In my opinion, it is a deception of the federal center and the government. Competent authorities will study the case. We’ll see the results of their work”, the parliamentarian said.

It may be a moot point, but even Vitaly Mutko did not know the exact sum needed from the federal budget for the construction of the stadium in the regional city. “Governor Merkushkin wanted to create a significant heritage object: a vast stadium. A whole recreational area has been designed, and we still cannot determine the final cost”, the RF Minister of Sports admitted

The situation in Samara is not an organizational failure, but a systematic failure. That’s what the President of the Estimator-Engineers’ Union, Pavel Goriachkin said: “The state is in a maze with the construction’s estimated costs! Builders do not want to go bankrupt at significant state construction sites, and do not want to go to prison as a “present” from the state. Inadequate prices and contract conditions, blackmail and under-the-table payment, constant inspections, delinquency… that’s what constructors expect at such objects, he said and added, “Very large, serious, respected construction companies have been “burnt” lately at state construction sites, and this negative tendency will continue”.

We are going to watch the development of the conflict concerning the stadium in Samara, but now nous revenons à nos… stadiums. 

To be remade

The first project for the “Volgograd Arena” sports facility in Volgograd was rejected by the state expertise after they pointed out 40 ‘punch’ points. In Rostov-on-Don, the Russian Technical Supervisory Authority went to the law courts with the general contractor for the usage of piles of lower quality than identified in the documents.

Photo: The Volgograd Arena stadium construction

Kazan Arena, erected for the 2013 Universiad, turned out not to be ready for the football competitions either. While preparing for the Water Sports World Championship that took place in the capital of Tatarstan last year, the stadium was transformed into a swimming center. All these facilities are to be dismantled for 2018.

The famous Fisht stadium in Sochi, in which the opening ceremony of the 22^nd Winter Olympic Games took place, turned out not to meet FIFA requirements. In particular, the roof over the play zone must be dismantled and side tribunes must be built. This work is to be completed this year.  

The reconstruction of Moscow’s Luzhniki Stadium, for the first and the final matches, is much more successful. According to the plan, all construction work at the object is to be completed in December, 2016, and the stadium is to be put into operation in February, 2017. To remind you, all facilities for track and field have been removed and the stadium has become nothing but a football pitch. That’s why it is the most complicated object of 2018 World Cup. The designers and constructors were given the task of preserving the unique historical look of the stadium, and yet still making it a modern object regarding the use of technology.

Kaliningrad Stadium is also worth mentioning. Its construction started later than the others, but the work is proceeding fast. The arena has its shape: by the end of April the foundation was poured, and metal structures are being assembled now. At the same time, the preparation work for the roof assembly has started. 

Can’t live without corruption

Zenit Arena in Saint Petersburg is a whole different thing. It is the most long-delayed of all Russian stadiums. It has been in the process of being built since 2007, and its budget has grown from 6.7 bln roubles to almost 35 bln.  

The construction was first supposed to be financed from local sources and the city budget, but in 2012 it became clear that the money was not sufficient. In September, 2012, the construction site was visited by Dmitry Medvedev and it was then decided that the money would be allotted from the federal budget. “It is not simply a long-delayed construction project, it is a source of shame”, the Prime Minister said at that point. As a result, the matter was delayed and, according to the city authorities, the object will be commissioned in December, 2016.

The construction of the arena has been accompanied by corruption scandals fit for a novel. The latest news: the Vasileostrovsky district court of Saint Petersburg obliged the Director General of one of the subcontracting companies, Dmitry Korshunov, to pay back more than 570m roubles of the city budget’s money. 

Mr Korshunov’ company, “Stary Gorod” (‘Old City’) dealt with the arrangement of cast piles at the stadium. Later it turned out that the price of the piles was set twice as high as it should have been, which led to a cost increase by more than 500m roubles.

And if we compare…

So, how much will the Russian stadiums constructed for 2018 cost if we compare them with modern foreign analogs (see table)?

To make a correct comparison, according to engineer-estimator Pavek Goriachkin, one should not use the official euro rate from the RF Central Bank, but the so-called “calculated rouble and euro parity index referring to the cost of construction and assembly operations” (purchasing power parity in construction). The given parity is calculated based on the cost of similar construction resources in Russia and in, say, Europe. For example, the euro rate for the adapter fitting cost is about 110 roubles to the euro, and ready-mixed concrete is 64 roubles to the euro.

The sense of parity is to show not what a conventional set of construction resources (labour payments, materials, equipment, etc.) costs in a given country but in terms of foreign currency. “According to our assessment, such parity in construction is about 46-52 roubles to the euro”, thinks the President of the Engineer-Estimators’ Union.

As a reference point, at the point of this article’s publication, the official rate of the All-European currency in Russia was 74.11 roubles to the euro. 

Simpler and cheaper

It should be noted that since the moment of being awarded the World Cup 2018, the Russian authorities have strived to organize the competition like they did the Sochi Olympics, i.e. without scrimping.  But, as we have already said, life has intruded, and some non-standard architectural solutions had to be rejected and the number of seats for spectators had to be decreased. For example, an unusual roof was planned to look like the Don River, and in Kaliningrad a unique entrance overhang resembling a Baltic wave was to be built, but in the end a simple standard framework of ready-made structures will be erected there.

The stadiums’ capacity has been significantly reduced: the total number of seats will not surpass 580,000. To compare: at the World Cup 2014 in Brazil and at the World Cup 2006 in Germany there were about 660,000 seats. Besides, part of the tribunes will be temporary and after the event they will be dismantled, decreasing the total number of seats to 496,000.

 
Looking forward to the event

Worldwide experience shows that holding such grand events as Olympics or World Football Championships changes the face and character of many cities, and even regions. For example, after the Olympics in Barcelona in 1992, the city got a reputation for being one of the most visited tourist centers in Europe, and indeed in the world. Calgary became a popular ski resort after the first Canada Winter Olympic Games: the number of tourists visiting the city annually has reached 3m people.

Will such changes happen with our Russian cities? Let’s hope so.

Millions of spectators are currently looking forward to the moment when the referee blows his whistle, and the worldwide feast of football starts.

Our journal will keep a careful eye on the course of the construction work at the World Cup objects, and we will tell you about the new stadiums in detail.

 

Vladimir GURVICH

 

 

The name of the stadium	City	Stadium capacity (number of seats)	Construction cost (m euro)	The year of opening	Construction cost of one seat (euro)
Wembley stadium	London	90 000	912	2007	10 137
Emirates Stadium	London	60 335	440	2006	7 292
Grand Stade Lille Metropole	Lille	50 157	324	2012	6460
Melbourne Rectangular Stadium	Melbourne	30 050	186	2010	6 179
Lvov Arena	Lvov	34 915	211	2011	6 043
Friends Arena	Stockholm	50 000	300	2012	6 000
Donbass Arena	Donetsk	51 504	294	2009	5 706
Allianz Arena	Munich	69 901	340	2005	4 864
Astana Arena	Astana	30 000	136	2009	4 524
Nelson Mandela Bay Stadium	Port-Elizabeth	48 459	214	2010	4 416
Gdansk municipal stadium	Gdansk	43 615	185	2011	4 260
Bucharest national stadium	Bucharest	55 600	234	2011	4 209
MMArena	Le Mans	25 000	102	2011	4 080
Stade Oceane	Havre	25 178	101	2012	4 011
Arena do Gremio	Porto-Alegre	60 540	239	2012	3 955
Forsyth Barr Stadium	Dunedin	30 748	113	2011	3 666
BBVA Compass Stadium	Huston	22 039	77	2012	3 472
Amex Community Stadium	Brighton	22 500	76	2011	3 380
Juventus Stadium	Turin	41 000	125	2011	3 049
Turk Telecom Arena	Istanbul	52 650	160	2011	3 049
Stozice Stadium	Ljubljana	16 038	43	2010	2 681
AFAS Stadion	Alkmaar	17 023	38	2006	2 232
Hypo Arena	Klagenfurt	31 957	67	2007	2 097
Grand Stade de Tangier	Tangier	45 000	80	2011	1 778
Estadi Cornella El-Part	Barcelona	40 500	62	2009	1 531
New Tivoli	Aachen	32 900	50	2009	1 520
Impuls Arena	Augsburg	49 000	65	2009	1 327
Coface Arena	Mainz	33 500	44	2011	1 313

 

TABLE

The cost of the construction of the recently built stadiums as calculated for one spectator’s seat

 

Source: KPMG