Sports Events Are a Lucrative Hunting Ground For Contractors
- By Mark H. Gay
- Nov. 07 2013 00:00
Dutch companies are lining up to provide advice and equipment to Russia in preparation for FIFA World Cup to be held in 2018. Russian companies are embarking on a massive project of upgrading and building sports stadiums. With a few exceptions, it is the first time since the Soviet era that sports stadiums have been built in the country. The lack of recent experience has created an opportunity for international consultancies, architects and management companies.
International contractors have had plenty of recent experience: in the FIFA World Cup in South Africa 2010, UEFA's European Championships in Poland and Ukraine and the London Olympics in 2012.
Ruben Dubelaar, program director, of Dutch Sports Infrastructure, representing a cluster of companies in the field of sports events, has the job of supporting Dutch companies when it comes to exports. "We put together a program for Poland and Ukraine to support Dutch companies and we analyzed the business that came out†of it".
From eight venues, about 10 to 15 companies contributed to the stadiums and infrastructure, from airports and baggage handling systems, to the pitch lighting, metal construction and roof structures. In total, Poland and Ukraine generated 200 million euro of contracts. Dutch companies also built two of the stadiums in South Africa.
The problems — and the potential profits — come not just from construction but also from legacy use of the stadiums after the three-week competition is over. They also include the management and maintenance of the stadium sites, and transport infrastructure at both a federal and regional level.
Delegations including the Dutch government, Philips and Amsterdam Arena, the home of Ajax, along with other companies, visited Moscow in March to meet Arena 2018, the organization under the umbrella of the local committee that will make sure all Russian stadiums will be meet FIFA standards.
In November, about 15 companies will visit Rostov-On-Don and Moscow. "The Moscow part is very important," said Dubelaar. "Two Dutch ministers are joining us and giving us an opportunity to see if we can talk with the right people."
Asked what is the biggest challenge that Russia faces, Dubelaar, speaking from Sao Paulo in Brazil, said, "everywhere you see the same thing: infrastructure is going to be difficult where the stadiums are in urbanized areas. You will have a challenge with crowd control and parking, to start with."
The legacy and how to develop a stadium not only for the World Cup but also for the broader city population is a challenge. It is important to get the backing of all the local community to create a stardom that can be successful and to avoid the white elephants that we know from South Africa."
Several major Russian private developers are building stadiums, including VTB Development at the VTB Arena, IFD Capital at Spartak Stadium and Gazprom at the Zenit Arena.
The state corporation Sport Inzhiniring will build seven of the new stadiums for the 2018 World Cup. Supervised by the Sports and Tourism Ministry, the corporation was charged in August with spending $3 billion on new build and reconstruction. Sport Inzhiniring will build six stadiums, in Volgograd, Kaliningrad, Nizhny Novgorod, Rostov-on-Don, Samara and Saransk. It will also redevelop the Yekaterinburg stadium. Spartak's Otkrytie Arena stadium in Tushino, due to open in 2014, with a capacity of 47,000 seats, is the first such project since the Soviet era, though Lokomotiv stadium was rebuilt in 2002.
Kazan, which has already built its stadiums, also constructed a new airport, and aero express train from the city center, and new roads in time for this summer's Universiade. Kaliningrad has also built new transport infrastructure
FIFA requires stadiums accommodate a minimum of 45,000 spectators. Those hosting semi-finals and finals require at least 60,000 seats according to FIFA's regulations. This creates a conflict between a city's needs and its obligations towards the World Cup, said Alf Oschatz, head of sports in EMEA for project managers Aecom, who worked on World Cup projects for Germany 2006 and South Africa 2010.
"There should be no development linked to these events that is not needed afterwards. If there is a need for an upgraded airport or train system and this can be accelerated or can be realized in preparation for an event then its great. But if there is no need, and it is just for the event, then it makes no sense. And if it is a stadium or any other facility it must be used afterwards to avoid a situation where the city ends up with a white elephant."
The Dutch delegation is keen to highlight the achievements of the Amsterdam Arena, one of the only stadiums in Europe that makes a profit. What makes the concept attractive to other countries is not that the arena is so special on its own but its integration with transport, an adjacent shopping, several music domes, as well as offices. "The whole area is used year round and is multi purpose so after the football season the grass goes out and it becomes a concert area."
Amsterdam Arena advises on the construction phase, through to the technical operation of stadiums and the training of stewards. It manages three stadiums in Brazil. It played a similar role in Euro 2012 and is involved in Qatar as an adviser to the supreme committee.
Another solution is temporary or modular stadiums. Dutch company Ballast Nedam developed the Plug and Core System for Qatar 2022. It involves a concrete construction that can be demounted after the tournament. The core of the stadium uses a limited number of standard components and can be removed and shipped elsewhere, making it reusable.
"As a cluster of companies we try to help you create a security system from the outset: talking to the construction companies, maybe even starting at the airport and with public transportation and seeing how you can develop a system that operates very well by working with the system suppliers and the operators.
Technical design, from the roof to surrounding facilities, is critical. But maintenance can be even more important. Only 25 percent of the cost of a stadium is construction, says Oschatz. Seventy to 80 percent is maintenance and running costs. There is a huge difference between a modern stadium and one built 30 years ago, not just in terms of the spectators but everything which is "behind the scenes", and needed from a technical perspective to run a modern stadium.