FEBRUARY 17 - SOCHI'S budget for the 2014 Winter Olympics has been cut by 15 per cent because the current economic crisis has made building materials cheaper, Russia's Deputy Prime Minister overseeing the preparations said today.

 

Dmitry Kozak revealed details of the cut during a meeting with Prime Minister Vladimir Putin earlier today.

 

In 2008, the Government estimated that the 200 construction projects for the Sochi Olympics would cost $12 billion (£8.4 billion).

 

The state was set to put up $7.5 billion (£5.2 billion), with the rest to come from the private sector.

 

With the plummeting rouble, the bill has been reduced to $9.2 billion (£6.4 billion).

 

Kozak said: "In just four venues, checked by state auditors, bloated costs worth a total of 7.5 billion roubles (£151.4 million) were found..

"This work has allowed us, taking into account all the venues budgeted last year and submitted to state auditors, to save 300 billion roubles (£6 billion) compared to original costs."
 
Alexander Piskunov, auditor of Russia's Accounts Chamber, said a revised budget covering preparations for the 2014 Winter Olympics would be ready by the end of this month.
 
He said: "Then there will be clarity on years, sums and construction sites."
 
Russia won the bid to hold the Games in the Black Sea resort city and the nearby Caucasus Mountains despite concerns about the enormous construction work that would be needed.

 

The ski slopes and snow-sport areas will require substantial expansion, none of the ice sport venues have been built, the region's hotels are insufficient and outdated and only a narrow winding road connects the mountain snow-sport area with the seaside ice-sports section.

 

Kozak said last month that the Olympic budget would be reviewed due to lower prices of construction materials and a weaker ruble.

 

Russia is widely expected to plunge into recession this year and is facing its bleakest economic outlook since the 1998 financial crisis, hurt by both the global credit crunch and slumping oil prices.

 

Earlier today, Kozak sought to ease fears that the global financial crisis may affect the Sochi Olympics and confirmed a steady investor interest in the Olympic projects.