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. Last Updated: 07/27/2016

Olympic Sponsors Pledge $460M

RIA-NovostiPrime Minister Putin meeting with Killy, head of the IOC panel coordinating the Sochi Games, in Sochi on Saturday.��
Rostelecom and MegaFon signed a record $460 million sponsorship deal for the 2014 Sochi Olympics as Prime Minister Vladimir Putin reassured visiting Olympic officials that preparations remained on track for the games.

The Olympic Organizing Committee said Saturday that the telecommunication companies would provide $260 million in cash and services and invest another $200 million into local infrastructure under the agreement, which it called the largest of its kind in Olympic history.

The announcement did not say how state-controlled Rostelecom, the country's main long-distance phone provider, and MegaFon, the third-largest mobile phone provider, would divide the spending between themselves as the games' first "Tier One" partners.

The much-needed cash inflow comes as the government is considering revising the games' budget in view of the global economic crisis, Deputy Prime Minister Dmitry Kozak said Saturday. Before the ruble devaluation started last year, the cost to upgrade the Black Sea resort to host world-class competitions was estimated at $12 billion in state and private money.

Kozak, Russia's point man on the games, did not say whether the revised budget would grow or shrink, instead listing factors that would influence spending. For example, he suggested that the ruble's sharp devaluation could make construction more expensive. Many foreign contractors are bidding to do the work, including companies from Austria, Bulgaria, Turkey, Germany, Finland and Sweden, he said.

Russia will also import a "big share" of construction materials, said Dmitry Chernyshenko, head of the Sochi Olympics Organizing Committee.

On the other hand, Kozak said, Russian building materials are getting cheaper and competition is growing for contracts as the construction market shrinks.

Putin, credited with winning Sochi's bid for the games, met Saturday with Jean-Claude Killy, chairman of the International Olympic Committee's coordinating commission, to assure him that there would be no delays in the preparations to host the games despite the global economic woes.

"Everything concerning the Olympic project … is protected by the budget and is guaranteed to be financed," Putin told Killy after the IOC team completed an inspection of the Sochi sites.

Spending will reach $6 billion, half of the initially planned $12 billion, by the end of this year, Putin said. Russia will set aside 127 billion rubles ($3.6 billion) from this year's budget to finance Olympic projects, up from 113 billion rubles last year, he said.

Twenty-one facilities for the games are already under construction, and workers will begin building the rest of them this year, Putin said. All Olympic facilities should be ready by the end of 2012 and available for test with lower-level competitions, he said.

Killy said he approved of the plans and the sites that had been picked for the facilities. "There are no obstacles for holding such Olympic Games that will surprise the world," he said, according to comments posted in Russian on the Cabinet's web site.

Killy also said he appreciated the work being carried out on Sochi's infrastructure. This inspection is his second since Sochi won its bid to host the games. "It is already visible from a plane that the city is really radically changing because you can see the construction of the cargo seaport and construction of access railroads," he said.

The Olympic Organizing Committee is scheduled to announce corporate sponsors from five more sectors of the economy: banking, oil, gas, metals and sportswear. It remained unclear Sunday how the selection worked in the case of telecommunications companies and who the other bidders were.

The committee said in the statement that Rostelecom and MegaFon had been selected because of the "feasibility of their proposals, defining a clear vision of the potential of our cooperation."

Calls to the committee, Rostelecom and MegaFon went unanswered Sunday.