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Olympic Problems in Sochi

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According to the statements of the Olympic organizers, Russia is not going to abandon its initial plans and obligations related to the Winter Olympic Games 2014 organization in Sochi. The budgets of the Olympic projects, financed either by the state or private investors, are subjected to the review only in connection with the construction budget reduction.

But the most burning issue is related to the land plot allocation of the Olympic facilities. It is worth noting that according to the law, the Program for Sochi Development and Olympic Facilities Construction and the data of the organization that carries out the Olympic facilities area planning scheme design and approval (Giprogor Federal State Unitary Enterprise), there is an already determined plot allocation for the Olympic facilities and other building with serve a function to the Olympic facilities. The land plots within the boundaries stated in the approved construction plan, are subject to withdrawal for public needs on the basis of the resolution of the Governor of Krasnodar. The land plots, as well as objects located there, are bought from the private owners on the basis of a market value appraisal report.

After the IOC Valuation Committee visit to Sochi in February 2007, the authorities promised to buy land plots from inhabitants of Nizhne-Imeritinskaya Bay, whose land plots were predominantly those subject to withdrawal at the market value, but a year and a half later no land plots purchase agreements had been supplied to their owners. Although according to the laws there is a 20-day window for drafting a purchase agreement upon receipt of an appraiser's report. The department responsible for organizing the Olympic Games in the Krasnodar area responds to the official inquiries that the delays in the statutory period for drafting purchase agreements is caused by the need to update appraisal reports on the market value of the objects to be bought.

It should be noted that the process of land plot title registration in Sochi is particularly inefficient in terms of time and money. For this reason many inhabitants of Nizhne-Imeritinskaya Bay haven't yet registered their land title in a proper way, or they are still in the process of registering their land title. In this case, there is no talk of market value or even of reasonable compensation; there is social tension, which has lead to numerous protests.

Litigations on invalidating the resolution of the Governor of the Krasnodar area concerning land plots withdrawal haven't been realized, as a great number of legislative innovations, meant for simplifying the Olympic construction process, give opportunities for administrative discretion, when applied, but, unfortunately, at the same time they do not supply any protection of the titleholders' rights. And the judges have demonstrated their position clearly -- if a decree violates an applicant's legal rights or interests, but it formally complies with the law, there are no grounds for its invalidation.

If the Olympic object arrangement only affects some insignificant part of the land plot, it is reasonable not to withdraw it in full, but to introduce a paid fixed easement, for example, i.e. a restricted right to use the land plot for public needs. Such an easement introducing procedure is organizationally simpler, and requires minimum of budget assets.

In terms of the financial crisis, all the executors of the Olympic project continue to emphasize the need for costs optimization and more efficient use of the existing opportunities. Financing difficulties, significant reduction of credit assets leads to an inevitable decrease in investors, who undertake truly "Olympic" obligations. And the state suggests to the existing investors that construction volumes should be correspondingly increased. Thus, the Turkish company Kolin, which won the tender for constructing the sea port cargo zone, will have to equip yachting in the harbor waters now.
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