The view from the front porch of the Grand Hotel, Corpus B, of the Gazprom Mountain Resort is splendid: towering snowcapped peaks draped in a thin veil of white clouds that shrouds the green grounds of the complex. The resort lies in Krasnaya Polyana, a section of the Caucasus Mountain range belonging to Russia. On a mid-July morning, tiny birds dart about, and the breeze brings fresh air scented by pine. Just paces away beckon tennis courts, swimming pools, a spa, an outdoor restaurant specializing in the aromatic dishes of the Caucasus, and a café whipping up pitchers of mint lemonade. In the parking lot, BMWs and Mercedes-Benzes share space with Hondas and Hyundais and even the humble Lada, the seemingly ageless Russian version of a base-level Fiat sedan.
The hotel is full, at about $100 a night for a standard double-bed occupancy—bathroom with heated towel rack and spa privileges included. The clientele is overwhelmingly Russian, from the middle and upper classes, large numbers of families with small children invading the cavernous dining hall for the all-you-can-eat breakfast buffet of blinis, roasted potato wedges, cheeses, and Danish. Guests spend their days riding the gondolas to the top of the mountains, there to trod (carefully) in the melting snowcaps, dotted with cow dung, the animals pasturing nearby; visiting the Skypark, at which the daring might attempt a bungee jump from an 1,800-foot-long suspension bridge, said to be the world’s longest; or trout fishing with long wooden poles at a well-stocked pond near a meadow, with an icy waterfall for bathing afterward. If it rains, visitors can catch a 3-D movie at the Galactica entertainment center. Vacationers have arrived from Moscow on three-hour-long charter flights departing several times daily for this bosky retreat; some have driven here from as far away as Novosibirsk, about 2,600 miles to the east.
Only a few years ago, Krasnaya Polyana was a wilderness, speckled with a few villages. Gazprom Mountain Resort, along with roads, power stations, and much else, was built for the Sochi 2014 Winter Olympics, held in February of that year. Is there anything more wasteful than the massive public-works undertaking known as the Olympic Games? The term “white elephant” seems invented for such grandiose displays—the flaunting of a nation’s (and its leader’s) ego, at enormous expense, with the inevitable ruin to the natural environment, for a global television event lasting about two weeks, to be followed by—what? The white elephant of fable is the rare animal presented by the king to a courtier, unasked for, not permitted to be used as a standard working animal, impossibly expensive to keep—and forbidden to be returned. It’s not something that anyone wants.
That metaphor doesn’t quite fit the Sochi games, at least so far. With its crowded swimming pools jammed with screeching Russian kids, as bikini-clad mamas and furry-chested papas lounge on deck chairs, iced drinks in hand, Krasnaya Polyana has defied the familiar model of deserted post-Olympic sites, from Athens to Beijing, which are littered with unused, abandoned facilities. But the astounding cost of the games—$50 billion, by far the most expensive Olympics ever—raises the question of whether the economic activity will ever justify, let alone recoup, this investment. Time will tell.
In Russia, it sometimes seems, everything one hears is a fable. At first, the Sochi script appeared to conform to the tale of the white elephant. There was a king—the czar-like Vladimir Vladimirovich Putin, leader of Russia (even when he nominally was not) since the end of 1999—who fancied the idea of staging a Winter Olympics in this part of his country. Perhaps the idea, as in one version of the story, was first suggested by a rich business crony, one of Russia’s infamous oligarchs. Or it may have been a personal whim—Putin was known to enjoy skiing in the region, its trails of unpacked virgin snow attainable only by helicopter. Russian leaders have a history of doing grandiose, improbable things, without much in the way of cost-benefit analysis. This is how Peter the Great, at the start of the eighteenth century, came to build his namesake czarist capital from scratch, on the icy marshes of the Neva. A Russian phrase—pochemu nyet, meaning “why not”—captures the spirit of such decisions.
The inhabitants of Krasnaya Polyana could have given a great many answers to the question of why not. Just as some Americans are attracted to a rugged but soul-nourishing life spent in primitive, remote pockets of the Rockies, Russians are lured to the Caucasus, the eternal enticement of pristine, skyscraping natural surroundings at grateful remove from the honking, starless city. The Caucasus is an immense range, blanketing Georgia, Armenia, and Azerbaijan and reaching the peripheries of Turkey and Iran. Krasnaya Polyana consisted of little more than cabins linked by narrow dirt roads skirting the streams, with goats and sheep, pigs and chickens, freely roaming about, and the locals liked it that way. It was an ideal setting for the women’s monastery tucked in the woods. Tourism, strictly for the adventurous, was modest.
Local sentiments, though, count for little in Putin’s Russia. He went to Guatemala City to make his pitch for the Winter Games to the delegates of the International Olympic Committee, and they bought it. In July 2007, when Sochi was announced as the host city for the 2014 event, anyone familiar with the town might have thought that this was a joke, in the sardonic Russian style. Sochi is a balmy, midsize city shaded by palm trees on the Black Sea coast, well known in Soviet times as a summer rest spot for workers and Communist Party functionaries. The only skiing likely to take place there is across the warm waves lapping the pebbled shores. In winter, the city was known for shutting down altogether.
Yet Sochi won the games because it was the only city of any significance in the region. The Olympic Village, the stadium for the opening ceremonies, skating arenas, and other facilities would be built in the smaller town of Adler, a short distance along the seacoast to the south. Mountainous Krasnaya Polyana, about 25 miles inland from Adler, would serve for outdoor sporting events. The longer-range plan, beyond the games, seemed to be to transform the entire region, the city of Sochi included, into a tourist haven. “The government wants to turn Sochi into its own little Monaco,” a restaurant manager told the New York Times in the fall of 2008.
Shopkeepers in Sochi groused about heavy-handed treatment by local government officials—demanding, for example, that they paint roofs a uniform color to make a pleasing canvas for visitors. The money for such work, supposedly to come from the public budget, never actually materialized. The grumblings coalesced into an organized civic complaint. “Sochi is simply not capable of hosting the Olympics, and continuing with the current approach threatens the well-being of the people of Sochi and the entire region,” Boris Nemtsov, a Sochi native and leading political opponent of Putin’s regime, wrote in an April 2009 Washington Post op-ed. “Already, hundreds of residents have been evicted from their homes. Thousands more are being forced into ‘lease’ agreements with the regional government. The beaches that have long attracted tourists in summer are slated to become loading ramps for the heavy machinery necessary to build Olympic facilities.” Nemtsov recommended spreading the sporting venues “across the country,” as was done for the 1980 Moscow Summer Games.
Met with a stony stare from the Kremlin, Nemtsov intensified his criticism, branding the entire Olympics endeavor a Putin vanity project. “It will be done in slipshod fashion and will begin to fall apart after the Olympics are over,” he told The Atlantic’s CityLab in a 2013 interview. Nearly two years later—one year after the games were held—Nemtsov was shot dead while walking across a bridge in Moscow near the Kremlin walls. It remains unclear who ordered what bore the hallmarks of a contract killing; Nemtsov had enemies unconnected with the Olympics project. Still, his bullet-ridden body was a grim illustration of the fate that can greet the most determined opponents of Putin and his projects.
“Adler now looks forward to being a venue for the World Cup, to be held in Russia in 2018.”
When Western journalists arrived from places like Washington and London to cover the Sochi games, they quickly seized on metaphors for an inept Olympic Games run by a maladroit, egomaniacal leader. A bizarre twin-toilet setup, malfunctioning curtains, water running “yellow and cold” from faucets, an “extreme shortage” of pillows—these creature discomforts all snagged headlines. Such coverage had an unmistakable political undertone. In a sense, the Western media, egged on by Russian critics of the Kremlin, had constructed a counter-fable of the Sochi undertaking as a Potemkin project, all façade, in an age-old Russian tradition.
The problem with this narrative is that it doesn’t hold up—as I saw for myself two years after the games, during my one-week stay in the region in 2016. From a flight originating in Moscow, I arrived in Adler, at Sochi International Airport—a $300 million project undertaken by the Russian oligarch Oleg Deripaska, one of a number of business barons enlisted by the Kremlin to build the infrastructure for the games. Adler isn’t a large airport, but it is clean and modern, its spacious arrival hall bathed in natural light—a far cry not only from the typically drab and dank airports of Soviet times but also from aging American airports whose best days are long behind them. Customs and baggage claim went smoothly. There was a pleasant café for coffee and pastry; travelers could also find fresh produce.
Virtually everything one comes across in Adler is new, constructed shortly before the games. A few minutes’ drive from the airport stands an amusement park featuring an ambitiously scaled roller coaster, a ribbon of steel painted bright yellow. “Nash Disneyland”—our Disneyland—proclaimed Svetlana, my taxi driver, with a wide smile, a large gold cross dangling from a chain around her neck. Business in Adler is good, she said. She parked her minivan, and we walked across a bike path to a Black Sea beach jammed with sun-roasted bathers setting their towels and umbrellas on a thin strip of dark gray sand and rock.
Adler now looks forward to being a venue for the World Cup, to be held in Russia in 2018, another mega-event for which Putin campaigned. The idea that development could serve uses beyond the games clearly was on the minds of planners. Auto racing is not an Olympic sport, but some $350 million was spent on the Sochi Autodrom, “Formula One’s best racing track of the year,” in 2014. Millions of Russians now watch, live on state television, Grand Prix races held there. The facilities have also been put to use for less obvious purposes. My arrival in Adler coincided with the 11-day World Choir Games, with participants from countries such as Argentina, Australia, China, Cuba, Great Britain, and the Philippines. Closing ceremonies were held in the Bolshoy Ice Dome, the venue for the Olympic hockey competition, a fantastic-looking gray metallic structure, intended by its architect, Andrey Ustinov, to evoke frozen water droplets and Fabergé eggs and said to cost as much as $300 million.
Just a few miles away from these sculpted shrines lies the border crossing to the Republic of Abkhazia, a self-proclaimed independent state, recognized as such only by Russia and a handful of other nations. Not a ruble of Olympic money was invested here. The roads are sketchy. Some buildings look abandoned, others are a rubble, and the seacoast town of Gagra, occupied over the ages by Greeks, Romans, Byzantines, and Ottomans, still shows the scars of the war fought in the early 1990s between Abkhazians and troops representing the former Soviet Republic of Georgia, from which present-day Abkhazia separated.
Back in Russia, by contrast, the journey from Adler to Krasnaya Polyana is smooth and swift, across a multilane, toll-free divided highway that runs through a brightly lit, well-ventilated two-and-a-half-mile tunnel carved out from mountain. This testament to demolition technique and asphalt engineering roughly traces the banks of a fast-flowing mountain river, on the other side of which is the narrow dirt road that once was the only route into Krasnaya Polyana. Motorists making their way on that track braved mud slides and, on occasion, were killed by avalanches of snow, ice, and rocks. The vehicle of necessity was the heroic UAZ military jeep, the staple for Soviet and Warsaw Pact forces.
Also parallel to the highway is what may be a genuine white elephant—an electric railway that links Sochi and Adler to the new mountain resort town of Rosa Khutor in Krasnaya Polyana. The federal-government-owned Russian Railways, one of the world’s largest transport companies, built this line for the games, to speed passengers from coastal venues to alpine ones and back, a train departing every few minutes. That’s not how it’s working now: on my numerous trips, at all hours of the day along the highway between Adler and Rosa Khutor, I saw a train in actual motion only once. The highway and the railway together, both built by Russian Railways, cost an estimated $8.3 billion.
Rosa Khutor greets the eye as an array of global and Russian brands: a McDonald’s, a fortress-like hotel by Marriott, and an outlet of Bosco, the Russian sportswear chain featuring tracksuits and the like with national logos. At its stone-inlaid public square, kids can ride scooters and Hoverboards and adults can puff pipes of fruit-flavored water al fresco at an Italian restaurant. This little town might as well be called Potaninville, after the Russian metals baron, Vladimir Potanin, chiefly responsible for its development. A year before the games opened, he grumbled to Reuters about being asked to take on, by the government, what is known in Russia as a social project, with “compensation only for expenditures,” as he put it, absent a reasonable margin for profit. Still, he did the job, perhaps in the spirit of a present, or podarok, for Russia’s supreme leader. The gift exchange is an essential feature of Russia’s political and business culture.
A few miles deeper into the mountains from “Potaninville” is Gazprom Mountain Resort. Visitors must pass through a gated checkpoint secured by cleanly shaven young men in crisp khaki uniforms. Golf carts motor guests around the grounds, on which fly the flags of Gazprom, Moscow, the Russian Federation, and the European Union. A state-controlled energy conglomerate, Gazprom spent an estimated $6.5 billion on projects geared to the games, including the resort and its sleek ski lift. Here, too, in this area, is a luxurious dacha complex, equipped with a helicopter pad, sauna, pool, guardhouse, and guesthouse, said by Russia’s leading anticorruption investigator, Alexei Navalny, to belong to Prime Minister Dmitry Medvedev, at a cost of $119 million. (A spokesman for Medvedev has dismissed Navalny’s allegation—that such properties represent bribes from oligarchs—as “propaganda insinuations.”)
An irony of this distinctively Russian milieu is the omnipresence of foreign products. At the Grand Hotel, the toothpaste supplied guests is Colgate, the room telephone handset is Siemens, and the iron is Bosch. Siemens also supplied the cars for the electric railway. Turkish contractor firms and their teams of imported guest workers, known in Russia by a German term, Gastarbeiter, did much of the construction work in Krasnaya Polyana. The peripatetic Turkish worker, known for his building exploits in the even more remote province of Chukotka, at the frigid northeastern tip of Russia, across from Alaska, seems to be an indispensable fixture of post-Soviet life.
It is a bit more than an hour’s drive from Rosa Khutor, through Adler, to Sochi up the coast. The city has not been radically changed by projects linked to the games. It looks neither prosperous nor downtrodden. Russians still come in large numbers for a summer rest; though Gucci and Louis Vuitton have outlets in a large, Soviet-era building at the marina, there is no sign that this watery place is on its way toward becoming an international destination like Monaco on the French Riviera. Local lore has it that the largest yacht at the docks belongs to Putin; it is said never to leave its berth except when he is in town.
All told, do the benefits of the varied works built in advance of the Sochi Olympics outweigh the costs? Let’s start with the costs broadly defined, to encompass not only projects, like the hockey arena, directly related to the games, but also so-called indirect expenditures on road, rail, and related “general” infrastructure. “The consensus figure is $50 billion, which, give or take a few billion, would easily qualify Sochi as the most expensive Olympics ever, about 25 percent more than the $40 billion spent on the much-larger 2008 Summer Olympics in Beijing,” the Washington Post reported in February 2014, as the games were getting under way. The apparent source for that number was a Russian deputy prime minister, citing what Russia was “prepared to invest” in the region. A few months later, a Russian state-run company that had supervised preparations put the total tab at $45 billion, including $10.5 billion from Russian Railways, the largest single contributor.
The Oxford Olympics Study, published in July 2016, assessed the cost of the Sochi games at just under $22 billion, in 2015 dollars (not counting general infrastructure). That worked out to $223 million per event. And so, yes, with the London 2012 Summer Games finishing in second place, at $15 billion, Sochi by this gauge indeed took the gold as “the most costly games ever,” the Oxford researchers concluded, adding that “this is extraordinary, given the fact that cost for the Winter Games is typically much lower than for the Summer Games.” (London weighed in at $50 million per event.)
How much of the Sochi spending was wasteful—the result of padded contracts and the like? Here the Oxford study found “sports-related cost overruns” for Sochi of 289 percent—nowhere near the 720 percent for Montreal’s 1976 Summer Games and below the 324 percent for Lake Placid’s 1980 Winter Games. The average overrun for Winter Games was 142 percent. “All games, without exception, have cost overrun,” the researchers found, unsurprisingly.
Costs, though, are not only about dollars and cents. What if the Sochi games had never been held? A native of Krasnaya Polyana spoke wistfully of the arrival of “civilization” here. Yes, he said, tourist business has put welcome money in people’s pockets. At the same time, locals believe that additions to the natural landscape necessary to sustain an industrial-tourist economy—such as the power-generating stations and connecting cables; the hot engines that power the procession of cars, vans, buses, and trucks; the furnaces that heat the rooms and the air conditioners that cool them; and the sizzling tubs of oil that crisp the potatoes at McDonald’s—are responsible for an appreciable rise in air temperatures. Krasnaya Polyana is baking, the resident mused, and it can never be returned to its pristine state.
As for benefits that can be attributed to the games, this, too, is not a simple calculation. Undoubtedly, thousands of permanent jobs were created, mainly in the tourist sector, as a result of the hotels, restaurants, retail shops, and entertainment complexes that were built for the Olympics and that still operate today. How many thousands of jobs is uncertain, because the Russian government appears not to have made any systematic effort to calculate a number. As for less tangible benefits, Putin aimed to reap global prestige for Russia by staging a showcase spectacle. But any such boost to his country’s image, and to his regime, was temporary, set back by his abrupt annexation of nearby Crimea, just over three weeks after the games concluded. That move, with the Kremlin’s covert military support for separatists in eastern Ukraine, brought Russia widespread opprobrium in the West. Boris Nemtsov, though wrong in his prediction that the Sochi projects would “fall apart” soon after the games, proved right in his understanding that the stature of a nation has nothing to do with an Olympics extravaganza.
But the equation also must allow for the benefits for the Russian middle classes of time spent there on excursion. It is abundantly evident that they are enjoying this new playground, which would not have been built but for the games. The child splashing around in the pool at Gazprom Mountain Resort, breathing in the fresh air—without doubt, he would voice his preference for a week here compared with sweating out the days in his apartment-block home in dirty, congested Moscow, with his parents stressed out at their jobs. Happy families, at least on vacation, really do all seem alike—and happiness surely counts for something. A strict utilitarian could argue that the Benthamite injunction to provide for “the greatest happiness of the greatest number” has been met here.
This sort of squishy balancing of costs and benefits attends to any Olympics. Were the 1980 Lake Placid games worth it to that part of upstate New York? Complaints about transportation and facilities at the games were rife. These days, the former Olympic Village, once used to house the athletes, functions as that most durable of American institutions—a federal prison. Locals joke that to see the village, you have to commit a serious crime—“fraud, embezzlement, drug trafficking, smuggling, maybe an act of terror.”
In time for the Rio 2016 Summer Olympics, the web magazine Bored Panda ran a list, accompanied by stark photos, of “Abandoned Olympics Venues from Around the World, or Why It’s the Biggest Waste of Money Ever.” Near the top of the list of 15 entrants was the Bobsled Track of the Sarajevo 1984 Winter Games, “left to crumble into oblivion,” with a graveyard now on the grounds of the original sports complex. In fourth place was the Athens Olympic Village for the 2004 Summer Games, a former athletes’ training pool now partially filled with brown sludge, a lone office swivel chair planted murkily on the bottom.
Certainly, Olympic projects have a way of deflating the lofty visions of their creators. When the torch was lit for the Sarajevo games of the 1980s, who knew that the city would become ground zero for a savage war fought in Bosnia in the 1990s? When the 2004 Athens games opened, the Greek debt crisis, a near-death experience for the country, was still five years away. Nothing built for the Sochi events made Bored Panda’s gloomy honor roll, but in time, some candidates could emerge. One reason Adler and Krasnaya Polyana were so heavily booked in summer 2016 was a happenstance of geopolitics: Russian tourists couldn’t travel to their favorite resorts in Egypt because the Kremlin had suspended all Russian flights to that country after a Russian charter plane broke up, in an apparent terrorist attack, after taking off from Sharm el-Sheikh Airport in October 2015. And Russians were kept from their usual haunts in the Turkish Mediterranean, too, because the Kremlin had canceled all Russian package tours to Turkey after Ankara, nearly a month after the Egyptian episode, shot down a Russian fighter jet near the Syrian border. Bad news for Russia outside the motherland seems good news for its domestic tourist industry—not exactly a sturdy foundation for prosperity in Sochi.
My best guess is that Krasnaya Polyana is likely to endure. The resort caters to a genuine appetite for summer and winter recreation in the mountains, and Russians have few other domestic choices available. Some of the big Adler facilities, expensive to maintain, may decay from lack of use. Should the now-dormant conflict between Abkhazia and Georgia restart, tourist prospects for the entire region could sink. Then again, should Russia’s nascent middle classes steadily expand—admittedly a tall order, given that the national economy has yet to develop strengths outside the natural-resources sector—it’s possible that tourism and recreational ventures will thrive throughout the area, with its efficient airport and network of good roads. Those given to hopeful dreams might say, pochemu nyet? Sochi may have been an unasked-for gift from the king, but it has yet to prove unwanted.
Top Photo: Bathers on Central Beach, Sochi, 2016 (ARTUR LEBEDEV/TASS/NEWSCOM)
