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Costs and challenges ahead as business gets ready for the World Cup

Soccer ActionRussia's victorious bid to host the World Cup will cost the country billions of dollars, but businesses are hoping to score from the competition's legacy.

Arriving in Zurich after the vote Finance Minister Alexei Kudrin said the country would spend 300 billion roubles ($10 billion) on the event.

Around $3.8 billion of this is expected to be sent on building a host of new stadiums, the overhaul of Russia's archaic transport network is a priority.

A great fix

The government has promised free travel between and around the host cities during the tournament, but with over 2,500 kilometres separating Yekaterinburg and Kaliningrad the service will need improving.

Even the plan to group venues into "clusters", which cuts down on much of the potential traveling, cannot eliminate the need for successful teams to move from far-flung group-stage venues to the larger, more central locations likely to stage knock-out matches.

"By 2018 Russia's high speed rail system will be more developed with high speed trains" between more destinations," said Andrey Rozhkov, a transport analyst at Metropol.

Prime Minister Vladimir Putin said in Zurich that infrastructure developments have already been planned up to 2013.

State monopoly Russian Railways, however, has warned of tariff hikes unless it gets more government investment.

Taking off

Russia's domestic aviation industry, which has developed a shaky reputation over the years, is expected to take off ahead of the tournament.

"Domestic routes will become much more attractive for passengers as Russian airlines will develop their fleet by acquiring more modern planes," said Rozhkov.

The country's road network will also receive heavy investment, but there are fears about where the cash will end up.

"Corruption is very common in the system and it will be hard to fight this disease in the modern Russian society," Rozhkov added.

Roads in Sochi have been constructed for the Winter Olympics ­ but it would have been cheaper to line them with a 6 cm thick layer of black truffles, Esquire magazine wrote in an ironic investigation.

Timetable for development

Although the government has promised modernisation since 2008, the World Cup sets a real deadline as hordes of football fans prepare to descend on the country.

"While the cost would likely run into the tens of billions, World Cup 2018 would inject a great deal more urgency ­ and a stricter timeline - into the government's modernisation programme," Chris Weafer, chief strategist at Uralsib, wrote in a note.

A second Sochi?

The Sochi Games has given the government experience of planning for major sporting events.

Spending on the Black Sea resort has already accelerated beyond the original budget, though Kudrin expects a cheaper World Cup.

But the Winter Olympics also raised questions about corruption and ecological problems near the coast.


Moscow's last major football event ­ the Champions League Final in 2008 ­ highlighted the city's shortage of hotels.

Some fans were offered make-shift places on boats, while others were bussed straight in and out again just for the game.

"One of the top three reasons for people not to come to Russia is that the hotels are too expensive," said Tatiana Veller, a managing director at HVS in Moscow.

"More attention to making it more convenient for tourists ­ signs in English and English speaking guides on the street ­ is hopefully something that will come for the World Cup and stay long term."

Veller expects foreign companies to come in and build decent, economy hotels following the model of Sochi's main developer Olympstroi.

Oleg Moseyev, press secretary for the Federal Tourism Agency, anticipated a rise in tourism even before the World Cup, and said the key challenge would be building the infrastructure to cope.


Ticket holders will be able to use their ticket as a visa ­ a policy that was successfully implemented for the Champions League final ­ but tourist companies want visas to be completely abolished.

And with the intensive media spotlight on the country it will also give Russia the chance to highlight some of its attractions.

"If done right these two events [the Winter Olympics and World Cup] will create some great PR that it is not scary to travel to Russia and there is international quality service," said Veller.

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