The Saransk stadium in Volgograd (formerly Stalingrad). The builder is calling for an extra $55m (Russian Federal Government)

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Russian contractor threatens to exit World Cup jobs over money fears

15 August 2014 | By David Rogers | 0 Comments

The chief executive of one of Russia’s largest contractors has threatened to withdraw from building two 2018 World Cup stadiums unless the federal government allocates an extra $110m for them. 

“There is no way we can fit into the proposed cost sheet,” said Gennady Timchenko, owner of construction company Stroytransgaz, adding: “Stroytransgaz does not work at a loss."

There is no way we can fit into the proposed cost sheet. Stroytransgaz does not work at a loss– Gennady Timchenko

In an interview this month with state news agency Itar-Tass, Timchenko, a member of Russian president Vladimir Putin’s inner circle, threatened to walk away from building stadiums at Volgograd (pictured) and Nizhny Novgorod unless the government raised its contribution from $420m to $475m for each. 

He said that was the minimum amount that would allow Stroytransgaz to break even. 

“[The government] plans to allot $670m to the arena in Kaliningrad, $530m to the one in Rostov-on-Don, $475 million to the one in Samara, and yet in Nizhny Novogord and Volgograd, where we are to build the stadiums, for some reason only $420m each.”

Timchenko’s demand follows the failure of companies that worked on the 2013 Sochi Winter Olympics. Companies Mostovik, Tonnelny Otryad and Olimpstroi all ceased trading after making losses on their contracts, Russian media have reported.

Vitaly Mutko, Russia’s sports minister, held a national press conference on Monday to respond to Timchenko’s allegations. In it, he alleged that Stroytransgaz’s financial demands were unreasonable.

“We have three, more complicated stadiums in Rostov-on-Don, Kaliningrad and Yekaterinburg,” Mutko said. “These arenas may turn out a bit more expensive. The other stadiums are ordinary arenas, which should be built within the normal price range of $420m that we spoke of.”

Mutko, however, did agree to investigate the proposed stadiums in Volgograd and Nizhny Novogord in hopes of reaching a compromise with Stroytransgaz.

Details of the Volgograd stadium were posted on the Russian government’s website yesterday. The 45,000 seat Saransk stadium will be located south of Volgograd Street and east of the river Insar. The project will include two four-star hotels and two shopping complexes.

Stroytransgaz was a subsidiary of Gazprom but is now controlled by Timchenko’s Volga Group. The company has been subject to sanctions by the US Treasury Department because of its connections to the Crimean crisis.

Meanwhile, there have been rumours in the football world that three cities may be dropped from the programme. Reports from Russia suggest the construction projects in Volgograd, the western exclave of Kaliningrad and Yekaterinburg in the Ural mountains are under scrutiny.

Russian sports media group R-Sport has suggested that the three are in danger of deletion because of excessive spending and a lack of sufficient medical and transport infrastructure.