Russia’s World Cup organizers face budget headaches

Saransk’s stadium for the 2018 World Cup is supposed to raise the profile of this little-known Russian city, but for now Alexei Merkushkin is just trying to keep costs down.
As Minister of Special Programs for the region that includes this city of 300,000 people south-east of Moscow, Merkushkin’s job is to make sure the smallest of Russia’s 11 host cities is ready to welcome fans not just to its new 45,000-seat stadium, but also the hotels and transport links that are supposed to transform Saransk in time for 2018.
Constructing the arena is set to cost 15.66 billion rubles (USD300 million), fully funded by the federal budget, with a further $10.5 million earlier spent on design costs.
Turning a provincial city into an international destination is not easy. Saransk normally sees only one flight from Moscow per day and the airport needs expansion to cope with World Cup crowds.
The city was a surprise choice as a World Cup host. Many Russians would have trouble finding it on a map and it’s hardly an eye-catching location, 460 km away from Moscow.
Following a year of international sanctions against Russia, the ruble is worth more than a third less against the dollar than it was in January 2014, while the low oil price is squeezing the federal and regional budgets that fund the World Cup.
The federal government has slashed spending by 10 percent across the board. While most World Cup-related expenditure is protected, government belt-tightening means a renewed crackdown on any cost increases.
“There’s a tough position that more cost increases won’t be allowed. So the cost that’s been laid out, that’s final,” Merkushkin told AP. Russian President Vladimir Putin has promised the economic turbulence will not affect the World Cup, FIFA head Sepp Blatter said in January. AP