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The Parallel Olympic Preparation
Oleg Deripaska’s Basic Element intends to invest roughly $5 billion to $7 billion in preparation of Sochi 2014 Winter Olympic Games. The amount almost equals the sum appropriated by the government. So, by analogy with Olympic State Corp., Basic Element has set up Sochi 2014 Project Management Board taken over by Yury Reilyan. Son of ex-chief of Sochi traffic police, Reilyan has been the general director at Armstroy Construction Group until recently.
The highlight of Sochi 2014 Project Management Board will be Imeretinskaya Riviera that covers roughly 1 million sq meters of housing, hotel and exhibition area. It also provides for building sport facilities, an international TV center and press center. Altius Development is the developer of the project, which extends even to the Olympic Village and has the overall budget of about $3 billion.
Basic Element won’t confine to the real estate in Sochi. So, Yury Reilyan will focus on other matters as well. Basic Element, for instance, is willing to invest 3 billion rubles (roughly $120 million) to construct a port in Imeretinskaya Bay with 6 berths able to handle freighters. Besides, the Management Board will have to sort out the Sochi problem of power supply shortage.
Moreover, Basic Element’s firms will also bid for creating the transport infrastructure in the city. Austrian Strabag, where Deripaska owns 30 percent, will bid at the tender for choosing a subcontractor to lay a bypassing road in Sochi. The length of that road will reach 20 kilometers, while the contract value is estimated at $2.1 billion.
And last but not least, the Management Board will supervise construction of a cement plant in Tuapse. The project budget will exceed $200 million and the plant’s capacity is estimated at above 1.7 million tons. The better part of the product will go for Olympic needs.
The overall amount to be invested in the Sochi project of Basic Element is above $3.5 billion. But it may step up to from $5 billion to $7 billion, said a source close to the company.
www.kommersant.com
All the Article in Russian as of Oct. 02, 2007
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