Russia cuts 2014 Olympics budget

Russian leaders have been concerned by their country's economic slump

Russia has cut its budget for hosting the 2014 Winter Olympics in the Black Sea resort of Sochi by 15%, Deputy Prime Minister Dmitry Kozak has said.

Mr Kozak said an assessment of construction projects found it would be possible to save about $8.3bn (�5.8bn), according to the Interfax news agency.

Russia has been hit hard by the global financial and economic crises after years of soaring economic growth.

The 2009 budget is expected to show its first deficit in about a decade.

In November, Mr Kozak announced that the state would seek savings on all major construction projects in which it was involved.

Overestimated costs

At a meeting with Russian Prime Minister Vladimir Putin in Moscow on Tuesday, Mr Kozak said an assessment of projects for the construction of sports facilities in Sochi for the Winter Olympics had identified a possible 300bn roubles in savings.

For example, the assessment found that the cost of four of venues had been overestimated by 7.5bn roubles ($208m; �150m), he said.

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"We have budgeted the cost of these facilities with a 15% reduction," he was quoted by the Interfax news agency as saying.

Mr Putin also noted that construction costs were decreasing as a result of a recent drop in the price of materials.

When Russian president in 2007, Mr Putin was credited with helping Sochi's winning bid, after he addressed delegates in three languages - English, Spanish and French. It was reportedly the first time he had spoken English at a public ceremony.

The Black Sea resort has a unique combination of spring-like weather and cold temperatures in the nearby Krasnaya Polyana mountains, which Mr Putin - a keen skier - said would guarantee snow.

"You know we can turn sports competitions into a really spectacular show and we are good at it," he added.

A Russian media report on Tuesday said preparations for the Olympics had also been affected by a lack of interest from firms in bidding for projects, forcing the local authorities to extend tender deadlines.

They also faced mounting difficulty in acquiring land necessary for Olympic infrastructure because owners were refusing to sell at prices offered by the government, the Prime-TASS news agency said.

The Austrian city of Salzburg, which lost out to Sochi for the right to host the games, said in November that it was still prepared to do so if Russia was unable to complete its construction projects in time.

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