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. Last Updated: 07/27/2016

Pinning Hopes on Krasnaya Polyana's Slopes

Itar-TassInvestors hope to transform Krasnaya Polyana, shown here in 1994, into a world-class sports and tourism resort that could host the Winter Olympics in 2014.
It has the support of President Vladimir Putin and a dream to host the 2014 Winter Olympics.

The Krasnaya Polyana skiing development near Sochi promises to rival the Alps with quality slopes and lodgings for ski enthusiasts and serious competitors alike, said officials associated with Gazprom, Interros and other companies that are pouring hundreds of millions of dollars into the 62,000-hectare area.

Gazprom, the state-controlled gas monopoly, plans to open a resort with six ski lifts, more than a dozen slopes and several dozen cabins later this year. Vladimir Potanin's Interros holding is to start construction of a $140 million ski center called Roza Hutor this summer.

The $425 million Karusel resort, which is the brainchild of Nortgaz co-owner and Krasnodar Senator Farkhat Akhmedov, is to open its first ski lift this month.

"There are not very many quality ski resorts in Russia, and those among them that are financially successful are even fewer," said Nikola Popov, general director of Roza Hutor.

"Our ambition is to build an international-standard ski complex with prices cheaper than Europe's," he said.

The Kremlin has similar ambitions and is backing Krasnaya Polyana and Sochi for the 2014 Olympics. With an eye on the Games, the government last week approved a 327 billion ruble ($11.7 billion) plan to turn Sochi into a year-round mountain and Black Sea resort.

More than half of the money will come from federal and regional coffers and go toward infrastructure such as electricity, communication and transportation. Outside investment is to cover the rest and will be spent on sports and tourism facilities.

Among the proposed projects are a 50-kilometer mini-metro system, a bobsled track and 14 other sports facilities that will accommodate 200,000 fans, new hotels, and a reconstruction of the main airport serving the area, in Alder.

The government believes that the annual flow of tourists to Sochi and the surrounding mountains would triple to 6 million by 2015.

If Russia wins the Olympics bid, it could collect an additional $1 billion to improve infrastructure from the International Olympic Committee and corporate sponsors of the Games. Russia is facing off against Kazakhstan, Georgia, Spain, South Korea, Austria and Bulgaria, and the winner will be announced next year.

If the bid fails, the program's $12 billion price tag would be halved.

Olympics aside, the government has another ambition: to make Sochi competitive with the Alps, the government says.

Putin, speaking at his annual news conference on Tuesday, promised to develop Sochi, saying that "the country needs a modern resort with developed infrastructure."

Putin was shown on television swooping down the slopes at Krasnaya Polyana when he was acting president in February 2000. Some of the country's wealthiest businessmen pledged at the time to make the area a Russian version of France's famed Courchevel ski resort.

Potanin is a regular at Courchevel and celebrates his Jan. 3 birthday there nearly every year.

Potanin agreed to build Roza Hutor together with another Courchevel regular, Chelsea football owner and Chukotka Governor Roman Abramovich. But in 2003 the project nearly fell apart when Interros announced it was suspending the project indefinitely due to a conflict between its ideas for the resort and the government's development plans.

The project was rekindled a year later and is now the proposed site for the Olympics skiing competition.

Roza Hutor is currently holding a tender for a chief contractor, and a winner is to be selected in March. Construction on the 429-hectare site is to start this summer and last four years.

When finished, the ski center will offer 55 slopes and 15 ski lifts to up to 9,500 visitors per day.

Roza Hutor will not yet build accommodations, but it may review its plans once the center's capacity reaches 7,000 people, Popov said.

Gazprom is more advanced in its development plans than any other investor. It has hired Samara-based firm Skado to equip the slopes and Turkish firm Hazinedaroglu to build accommodations on the 95-hectare area.

Skado began construction last spring, and is now completing six ski lifts on the Psekhako Ridge and 16 runs, said Alexander Rytsarev, head of design at Skado.

"We are now halfway finished. There will be six more lifts and 13 more runs," Rytsarev said.

Gazprom has completed more than 30 cabins and is currently building three hotels for 950 guests, said Viktor Protsenko, the local administration's chief architect, who is overseeing Krasnaya Polyana.

The resort also has a fenced-off three-story wooden guesthouse for official delegations that is built in the traditional Russian style.

The resort has parking for 300 cars, its own power generator and its own gas pipeline, which stretches 60 kilometers from Adler.

A shopping and entertainment center is to be completed in 2008-09, Protsenko said.

Gazprom refused to discuss the resort. A source familiar with the project said Gazprom allocated $170 million for construction last year.

Later this month, the Karusel resort will open its first ski lift, and it will be able to carry 2,400 skiers an hour. By 2012, Karusel is to have 20 ski lifts, slopes of a combined length of 70 kilometers, ski schools, and cabins, hotels and apartment blocks for 4,500 guests.

The only existing operator in Krasnaya Polyana, Alpika Servis, intends to invest $20 million over the next two years into expanding its number of ski lifts from the existing five to an eventual 12 and stretching its slopes to a total of 50 kilometers, said its chairman, Pyotr Fedin. Alpika also plans to start construction of a $30 million hotel and entertainment center next year.

Demand is expected to be huge. Russia has about 2 million ski enthusiasts, and 150,000 to 200,000 of them are believed to go to Europe every year to ski, spending at least $1,000 each. Those who stay at home have to line up for hours waiting for ski lifts and often dealing with less-than-friendly service.

"The growth is great. The number of Russian skiers in the French Alps jumped 41 percent" last winter, said Mikhail Musiyants, general director of Erzog, a tourist agency that specializes in ski resorts.

Musiyants said the key to success was to build ski lifts. "Once ski lifts are in place, people will rush there and then accommodation will catch up," Musiyants said.

Boris Petrov, head of the Association of Mountain Ski Centers, was more skeptical. He expressed concern that the projects were being rushed ahead without adequate planning. "We need to first create a registry of mountains and evaluate whether they are fit for ski centers from environmental, economic and political points of view," Petrov said.

But Protsenko, the Krasnaya Polyana architect, was not concerned. "When all these ski centers are in action, there will be demand for them all," he said. "The lines are just crazy over the New Year's holidays. And we're talking about serious folks whose pockets are not empty."