Increasing Construction Costs for 2018 FIFA World Cup stadiums

 

In view of increasing construction costs for the stadiums hosting matches of the 2018 FIFA World Cup the Russian Ministry of Industry and Trade, according to Sports Minister Vitaly Mutko, has been ordered to look into the legitimacy of price increases. “First of all, we need to analyze how fair the prices are and the legitimacy of concrete price increases,” Mutko said. “The Ministry of Industry and Trade received a relevant order; it already works on it, collecting data from all contractors on the legitimacy of price increases and possible reduction of costs.”

Mutko added, however, that no more stadiums’ capacity would be reduced from 45,000 to 35,000 seats. “We have already received permission for two 35,000-seat capacity stadiums,” Mutko said. “FIFA is not giving us any other concessions and all other stadiums must have a minimum 45,000-seat capacity.” FIFA announced in August that it allowed Russia to have two 35,000-seat capacity stadiums for holding matches World Cup matches

“We have ordered contractors to consider financial adjustments to the project,” he said. “There will be minor changes”. Mutko added that Russia would cut its budget spending on the organization of the 2018 FIFA World Cup, but would keep its expenditures on the infrastructure and stadium construction unchanged. According to the minister, financial programs of all departments involved in the organization of the 2018 World Cup were slashed by 10%, excluding spending items on the infrastructure. “We are speaking here about certain organizational issues, subsidies to the organization committee and preparations for the drawing ceremony,” Mutko told the Itar-Tass news agency “All infrastructure investments remain unchanged.” Late last month Mutko had stated that Russia’s construction costs for football stadiums, which will be hosting matches of the 2018 FIFA World Cup, remained unaffected by the national currency exchange rate volatility.

Russia’s Rouble has slumped over the past few months to a record low of 75 Rióubles to the dollar in mid-December,
compared to an average of 38 Roubes in September, but rebounded to 53.23 by late December. The Russian currency currently stands at 69 Roubles to dollar. It was traded at 33 Roubles to the dollar at the start of 2014. The total budget of 664.1 billion Roubles for the organization of the 2018 World Cup was announced in 2012. This figure stood at 20.5 billion US$ based on the 2012 average exchange rate. If converted to the current exchange rate this figure drops to 9.6 billion US$, says Itar-Tass.

This article was republished with permission from the original author and publisher, Karl-Heinz Huba.

 

Leave a Reply

Your email address will not be published. Required fields are marked *