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FIFA Hands Russia 2018 World Cup

APDeputy Prime Minister Igor Shuvalov grinning as he holds the World Cup trophy after the FIFA vote on Thursday.

FIFA sent the World Cup into uncharted territory Thursday, handing the 2018 edition to Russia and going to Qatar in 2022, in what Prime Minister Vladimir Putin called “a day for rejoicing.”

Russia’s selection came despite Putin’s decision to skip the final vote in Zurich, but his influence still had an impact on FIFA’s 22 voters as the bid won out over England, Spain-Portugal and Belgium-Netherlands.

“We go to new lands,” FIFA President Sepp Blatter said. “Never has the World Cup been in Russia and Eastern Europe, and the Middle East and Arabic world have been waiting for a long time so I’m a happy president when we talk about the development of football.”

First Deputy Prime Minister Igor Shuvalov, who was on hand to accept the FIFA trophy, appealed to the organization’s sense of football’s power to change society and likened the choice to the “very brave and wise decision” of awarding the 2010 World Cup to South Africa.

“You have entrusted us with the FIFA World Cup for 2018 and I just can promise, we all can promise, you will never regret it. Let us make history together,” he said. “We are building a new Russia. … We can achieve this better and quicker with your help.”

The MICEX Index climbed 1.9 percent to 1,632.37, the 30-stock gauge’s highest level since July 2008. Severstal and Novolipetsk Steel jumped as investors speculated they would benefit as the country builds infrastructure for the event.

Often derided as a conservative organization, the decisions were a big gamble for FIFA, which could have gone for assured sporting and commercial success by handing the event to England and the United States.

Despite criticism in FIFA study reports last month of the Russian and Qatar bids, it chose to go deep into Eastern Europe and right into the Persian Gulf.

Following corruption allegations that led to two of the 24 FIFA executive committee members being excluded from the vote, the daring decisions that challenged conventional knowledge are bound to be controversial.

England was eliminated in the first round of 2018 voting, earning only two votes. In the second round, Russia won an absolute majority with 13 votes.

“It is a great victory,” said Russian bid CEO Alexei Sorokin, whose presentation promises to build 13 stadiums while three will be renovated.

Transport logistics, however, will be a huge challenge with stadiums scattered from St. Petersburg to southern 2014 Olympic winter host Sochi, and from Kaliningrad to Yekaterinburg.

Putin, who personally lobbied throughout the bid campaign, said he would immediately fly to Switzerland to thank voters for their decision.

“Russia loves football. Russia knows what football is and in our country we have everything to conduct the 2018 World Cup on a very worthy level,” Putin said. “The decision corresponds with FIFA’s philosophy for developing football, especially in regions of the world where that development is needed.”

President Dmitry Medvedev, who played no visible role in securing the event, wrote on his Twitter account: “Hurrah! Victory! We’re hosting the 2018 championship!”

“Now we have to get ready for hosting the World Cup. And, of course, perform well,” Medvedev wrote.

Russia’s bid includes construction of 13 stadiums and renovation of three more at a projected cost of $3.8 billion and an operating budget of $641 million for 2017-18. Russia pledged to make “major upgrades and capacity increases” at most airports serving the 13 proposed host cities.

“This is great news for steel companies and transport and construction names,” Chris Weafer, chief strategist at UralSib, said from London. “The government can no longer afford to dither on its $1 trillion program for improving Russia’s infrastructure.”

Russia is so ill-prepared at the moment for a World Cup that its bid was based on computer graphics and blueprints to give FIFA executives some idea of what stadiums and transport infrastructure might look like by 2018. Only one of the country’s stadiums meets the organization’s requirements.

FIFA warned during a recent visit that building of venues, roads and other infrastructure would need to start immediately if the country stood any chance of being ready on time. Russia says the clean-slate approach is a plus, that building from scratch ensures the needs of the facilities can be planned and existing clutter need not interfere.

Finance Minister Alexei Kudrin said Russia would spend “significantly less” on preparations for the 2018 World Cup than on the Olympics in Sochi. “We have a clear plan on assigning sites,” he told reporters in the Black Sea resort.

Russia is halfway through building facilities for the Olympics from scratch in a project first slated to cost $12 billion but now thought to be much higher.

Russia has vowed to waive visas and provide free ground transportation for all World Cup ticket holders.

Officials say the World Cup will include 13 major cities, in the country’s European territory, stretching from the enclave of Kaliningrad in the west to Yekaterinburg in the east.

There are four clusters: A northern cluster is based around St. Petersburg, a central cluster around Moscow, a southern cluster around Sochi — where an Olympic stadium will be converted into a football venue — and a Volga River cluster incorporating a slew of cities along its path. Russia is promising 16 football-only arenas, and says some are already under construction while others are being refurbished.

(AP, Bloomberg, Reuters)

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