Finnish companies aspire to share in construction for Sochi Winter Olympics

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The current economic crisis has caused investors to adopt a more cautious approach with regard to investing in the building contracts for the 2014 Sochi Winter Olympics. As a result, Russia has redoubled its efforts in trying to lure in foreign investors.
      The equation may result in a Finnish-built hotel being erected in Sochi. Currently no less than 11 Finnish firms led by Finpro are visiting Russia, checking out waterfront plots on Sochi’s Black Sea coast. Many other firms have also expressed an interest in the project.
     
But money matters are an issue even with the Finns. According to Finpro’s Sochi programme project manager Seija Spiridovitsh, an investment package aimed at investors both in Finland and in Russia is currently being prepared.
      In Finland, the eyes are on the government in particular.
      The Finns have already been offered two plots in Sochi. Of these, the Finns are especially interested in a 14-hectare site owned by the city. On the site a timber-framed hotel containing 1,450 rooms would be erected for the use of the Olympics.
      After the Games, the building would be sold as apartments in the private sector. The value of the project is in the region of USD 100 million.
      “The idea is to realise the project on a turn-key basis from the planning phase until the finished hotel rooms have Iittala glass candle-holders on the window-sills or something”, Spiridovitsh explains.
      Negotiations with various Russian players have now continued for three months.
     
The Russian Association of Architects has acted as a mediator between Finpro and the Russian government body responsible for the construction of the Games.
      If everything goes as planned, a cooperation agreement on the construction of the hotel complex will be co-signed with the Russian Association of Architects on Thursday morning.
     
The Russians have also expressed their wish for the Finns to set up a factory in Russia that would produce wood frame elements.
      In the first instance the factory would produce elements for the use of the Sochi hotel project and later on for a national housing programme by the Russian Federation.
      Spiridovitsh emphasises that so far these are just discussions, however, and not agreements.
      According to Spiridovitsh, the Finnish companies embarking on the Olympic undertaking will form a consortium that will then offer the co-produced project for investors. During their current trip to Russia, the Finns will meet with representatives of potential Russian investors such as the natural gas giant Gazprom, the oil company Rusneft, and the private investment firm Interros.
     
The key question in organising the financing for the project, however, is the support of the Finnish government.
      “We have considered a model, in which we would return to the bilateral commerce type of arrangement”, Spiridovitsh explains.
      The bilateral arrangement was in use during the Soviet era in commerce between Finland and the Soviet Union, and it was based on an exchange contract of goods and services between the two countries.
      According to Spiridovitsh, the arrangement would guarantee that the Finnish suppliers would get their compensation according to schedule.


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