Hundreds of workers at an Olimpstroi-funded construction site in Sochi have not been paid in months, with some complaining that they are going hungry after giving up their passports as collateral to get food at grocery stores.
The scandal is the latest to hit Russia’s $13 billion effort to ready the Black Sea resort for the 2014 Winter Olympics. Residents displaced by construction for the games have complained that they are not being adequately compensated, while environmental activists say the work is blighting the region.
About 180 people were not working Friday, exasperated by months without pay and desperate for food, said Sergei Dykhalov, who was hired by general contractor Moskonversprom as the site’s crane operator for 36,000 rubles ($1,200) a month.
He said he hadn’t received his salary since December.
“People believed them. We thought it’s an Olympic project, controlled by the government. I thought it would be the pride of Russia. Instead, they have sent us like slaves into a mine,” Dykhalov told The Moscow Times.
In July, Moskonversprom won an Olimpstroi tender to build 166 houses for residents in the Imeretinskaya valley. The company’s winning offer was 20 percent below the maximum bid price of 872.8 million rubles ($30 million), according to the Olimpstroi web site.
Work was to begin immediately and be finished by May 2010.
All sides agree that the project is now behind, but the consensus ends there. Moskonversprom blames its subcontractors for the working conditions and delayed wages, but the subcontractors say they have not been paid. Workers for both the general contractor and one of the subcontractors told The Moscow Times by phone that they were not being paid.
Dykhalov said he could not return to his mountain village in North Ossetia because debt collectors are waiting for him to pay back a bank loan.
“I will not work until they pay me, and then I will quit, never to work here again,” he said.
In the meantime, he said, they cannot hire another crane operator because the machinery is signed out under his name.
Wage arrears shot up in Russia as the economy collapsed in late 2008, particularly at stalled construction sites and industrial plants that supply them. Wage arrears rose to 4.1 billion rubles in January, or by 15.5 percent compared with a month earlier, according to the latest figures from the State Statistics Service.
If a company has funds and willfully does not pay salaries, its executives can be punished by up to two years in prison, according to Article 145.1 of the Criminal Code. Employers are required to prioritize salary payments ahead of other expenses if they have unpaid wages.
Solnechny Dom, a subcontractor on the project, said Moskonversprom owed about 5 million rubles ($171,000), making it impossible for them to pay salaries.
“I have not had a single day off for three months and have not seen a single ruble,” said Arnold Yeprikyan, a foreman with Solnechny Dom, whose 168 workers on the project were building 19 houses. The firm, based in the Krasnodar region town of Tuapse, was last paid an advance in December and has finished its project, he said.
“There are about 80 of our people still here, the rest gave up and left for home or to other jobs,” Yeprikyan said.
He estimated that as many as 400 workers at the site were not being paid.
“We saw Putin and Medvedev say on TV that people eat well at construction sites in Sochi. What they give us is not human food, and they charge us 200 rubles a day for it,” Yeprikyan said.
He sent a short video clip from his cell phone to web site Blogsochi.ru, which shows the area where 240 of the workers are housed. They live in 40 mobile housing units with six bunks in each, overflowing portable toilets, and an army tent that houses a kitchen.
The only shower is closed, the video shows.
Moskonversprom chief executive Valery Morozov told The Moscow Times that Solnechny Dom provided faulty work and was responsible for the poor staff housing. The people who are protesting are no longer employed, and the work has not been disrupted, he said.
Workers said journalists have been barred from the guarded site.
“There are certain firms connected with bandits that gained access to Olympic construction projects,” he said, adding that several such companies were among his subcontractors.
Solnechny Dom should have finished all the work before New Year’s but took too long to hire enough workers and made mistakes during construction that the next subcontractor has to correct, Morozov said.
“Instead of accepting partial payment, the firm hired some unclear ‘elements’ … to create a commotion,” Morozov said. The protests were part of a campaign by certain interests in Sochi to discredit a Moscow company, he said.
Moskonversprom was founded in 2000 and is majority owned by Moscow-registered Skattsentr, which is 100 percent owned by Morozov, according to Interfax’s SPARK database. City Hall’s property department has a minority stake in Moskonversprom.
The company’s web site says its former clients include the Office for Presidential Affairs, City Hall, and the Federal Security Service.
Morozov denied that he had failed to pay any salaries and accused Solnechny Dom of stealing 1.5 million rubles and setting the workers against him. “We may have some debts somewhere for maybe a month because Olimpstroi did not accept all the work and did not pay for everything,” he said.
Though construction is supposed to be done in a few short months, “the situation with the deadline is complicated,” Morozov said.
Deputy Prime Minister Dmitry Kozak, who is overseeing the Sochi preparations in the government, said Friday that all problems regarding the resettlement of 700 families had to be addressed this year. “The issue has to be solved this year, and we should forget about it,” he said.
“There are global decisions that have been made, and the week-by-week situations will be solved without impacting deadlines,” said Ilya Djous, Kozak’s spokesman. “Construction organizers will solve all the problems with their contractors.”
Spokespeople for Olimpstroi, the state corporation tasked with overseeing all of the Olympics construction, could not be reached for comment Friday.
“For six months, I’ve been getting only partial payment instead of the 25,000 rubles per month in my contract,” said Igor Pechorin, who was hired by Moskonversprom to operate a concrete mixing machine. He said he was owed about 150,000 rubles in back wages.
Contacted Sunday, Pechorin said Moskonversprom asked him to resign after he started speaking to reporters. “I have worked overtime with no compensation,” he said.
Moskonversprom brought in a new subcontractor, and some work has continued through the weekend after workers were told Friday that they would be thrown out if they didn’t get back to work, he said.
“People here are hard workers. They came from far away and a lot of them have been used and thrown out,” Pechorin said, adding that he had three children at home in Siberia, where the hot water would be turned off if his bills are not paid. “I trusted them for six months. I’m not interested in TV or radio, and I’m ashamed to be hauling this trash about the Olympics into public, but people are losing their patience.”
Moskonversprom has changed its local management three or four times and failed to bring construction materials on time, he said.
“There is no sand when workers need it, and it’s all of the same kind when they need two kinds,” he said. “I eat once a day now and walk around feeling dizzy.”
Many of the workers are stuck because they have pawned their belongings at the local grocery store for food, said Svetlana Beresteneva, who lives in the neighborhood. “The store manager has a whole bag of cell phones, driver’s licenses and passports, and a toilet paper-size roll listing people’s IOUs,” she said. “Mostly it’s for bread, cigarettes and kefir.”
Beresteneva said she made a verbal agreement with Moskonversprom to house six of their employees and has not been paid.
“They said in September, ‘let things settle down and we’ll sign an agreement,’” she said. “Well, things are still settling down.”
Some locals prepared food for the workers Saturday, workers said, and about two dozen people came to the makeshift soup kitchen organized on the hood of a car.
“These workers cannot live this way forever, eventually they can go off stealing,” Beresteneva said. “Last year, hungry people from a different construction site went stealing vegetables from our gardens at night.”