Expect some fouls in Russia
● With days to go until the start of the Fifa World Cup, Alexei Merkushkin is hoping to turn a city that most Russians have never heard of into a global investment destination.
Business delegations from Japan, Denmark and Iran are travelling to Saransk, capital of the swampy province of Mordovia. Japan is sending a princess. Even Gérard Depardieu, the French actor who became an official resident of Saransk when President Vladimir Putin gave him a Russian passport, may make an appearance.
“The world is looking at us. This will have a real economic effect on our investment climate,” said Merkushkin, who is heading Saransk’s preparations.
After surviving the scandals of the Sochi Winter Olympics in 2014, Russia’s preparations for football’s biggest tournament are largely on schedule. Out-of-the-way host cities such as Saransk, best known for its prisons and its central role in a race-walking doping scandal, are keen to benefit.
Merkushkin said it was chosen ahead of other cities thanks to a concerted effort by local government, which his father, Nikolai, ran for years before becoming governor of Samara, a position he held until 2017.
Even though it is only hosting four matches, an influx of state investment could lead to a rise in Saransk’s gross regional product of up to 3%.
This is in spite of the fact that recession has forced the Kremlin to scale back its plans. It spent $50-billion on Sochi and ended up forcing state banks to take huge writedowns. By contrast, the Kremlin said last year that it planned to spend about $13.2-billion (about R171-billion) on the World Cup.
Alexei Sorokin, head of the World Cup organising committee, has said only about 70% of that came from the government budget, with the rest being financed by private investors.
Some private tenders have generated accusations of cronyism. Mordov Cement, a local company where a couple of Merkushkin’s close relatives had significant minority stakes until at least 2014, won contracts to supply the stadiums in Saransk and neighbouring Samara.
Merkushkin said his family had passed background checks and were not connected to the contractors. “It’s mostly garbage,” he said of the cronyism accusations aired in Russian media. Mordov Cement did not immediately respond to requests for comment.
St Petersburg spent well over $1-billion on its stadium, where technical problems mean work will continue after the tournament. Nizhny Novgorod and Samara both raced to finish their stadiums on time.
Several people are now in jail awaiting trial on corruption charges relating to Kaliningrad’s stadium.
The 35 000-capacity arena stands on marshy ground known as “the Island” that had made construction near-impossible for decades. Aras Agalarov, the construction magnate and former business partner of US President Donald Trump, said the land was a “pure swamp 50m deep” and claimed building on it was impossible.
When asked by the government to build the stadium himself, however, Agalarov said the land was “only a bit swampy” and gladly agreed.
At one point, the half-built stadium was at risk of sliding into the swamp after a subcontractor owned by fellow oligarch Ziyavudin Magomedov allegedly delivered low-quality sand for its foundation.
Magomedov is now awaiting trial on fraud charges alongside the subcontractor’s top executive and Kaliningrad’s former construction minister. They all deny the charges.
Anton Alikhanov, Kaliningrad’s governor, nonetheless thinks the tournament will show Kaliningrad’s potential as an emerging hub. “People will keep coming to visit us after the World Cup. It’s effective advertising,” he said.
As Saransk prepares for its first game on Saturday, with Peru taking on Denmark, Merkushkin said his focus was on creating a good impression on foreign visitors.
Officials have been scrambling to find enough hotel rooms for the large number of supporters expected for the four matches, while also trying to keep prices down after some locals charged fans more than $1 000 a night for a dilapidated Soviet-era flat on Airbnb.
“Thirty-thousand people coming is a lot even for Moscow. If people have to stay in a neighbouring city, that’s totally normal,” Merkushkin said. — © The Financial Times