Once the principle had been established, the obvious question was: where? There was no question that Sochi offered considerable scope for improvements. Indeed, previous bids for the Games, in 1998 and 2008, had been rejected by the International Olympic Committee, who cited the poor standard of the existing infrastructure to explain their decisions. By any metric you wanted to use, its infrastructure was either non-existent, or, at best, an antiquated hangover from the Soviet era. It was symptomatic of the asymmetric rate of progress in Russia. While large metropolises like Moscow and St Petersburg had been awash with money and influence since 1991 (even if it had often been shared unevenly), huge swathes of the country had been neglected, allowed to degrade. Because there was no industrial base in the region, there was no reliable supply of electricity, and the telephone and communications networks, sanitation, water supply and roads all fell drastically short of the demands of the twenty-first century. An incredible amount of work would be needed before it was anything like being fit for purpose.
The travel infrastructure was similarly deficient. For instance, the area’s precipitous topography had ensured that there was no railway system that was even halfway capable of supporting an international event, and nor was there a highway connecting the resort to the rest of the country’s road network – just a single B road, which threaded a precarious route between two high-altitude passes.
Furthermore, this once-beautiful stretch of coast, which during the Soviet Union had been one of the nation’s most desirable tourist destinations, was suffering from profound environmental issues. Most of its raw sewage was being pumped directly into the sea. The stringent environmental regulations enforced by the Olympic Committee offered a notable opportunity to clean up this region’s badly damaged ecology.
Tourist numbers had plummeted since the collapse of the Soviet Union. The end of communism made itself known in other ways too: several sanatoria closed down once the state subsidies for Sochi dried up and, following the disintegration of the multi-ethnic union, armed conflicts became an everyday reality in the Caucasus region. The civil war in Abkhazia, which flared up no more than 50km from the centre of Sochi, had devastated famous Soviet resort towns on the Black Sea Coast, such as Sukhumi.
Last but not least, there was one other unassailably significant reason for choosing Sochi: somewhat counterintuitively, the location and geography of this humid, Caucasian city meant that it was the best place in Russia to host a Winter Olympic Games. It cannot be too cold (no competitions can take place if the temperature falls below minus twenty degrees Celsius), which in February, when the Games would fall, excludes most territories in Russia. By contrast, Sochi is in the sub-tropics, which sounds like a problem, until you remember that, while the event is known as the Winter Olympics, more than 50 per cent of the medal pool is awarded in the events which don’t actually require winter conditions (for instance, all the ice events are held on artificial ice, so you do not need arctic conditions).
The second, related, point concerns the kind of mountain present in the area, since these are integral to the alpine events. (What is not integral, contrary to what one might expect, is snow: while finding the right topographical profile is crucial, the pace of technological development has rendered natural snowfall unnecessary.) It has to be possible to create runs with a height difference of as much as 1,000m, and a height difference alone is insufficient; the slope must also be steep enough. Neither the Ural nor the Altai mountain ranges possessed the requisite height difference, and in European Russia, only the Caucasus (where Sochi was situated) and Khibiny (which regularly experiences temperatures in February of minus thirty) were steep enough. So while Russia is huge, there were no other locations in the country that satisfied all the Olympic Committee’s requirements regarding topography and temperature.
All this meant that there was widespread support for the idea of hosting the Winter Games in Sochi. And when they were awarded to the city in July 2007, the news was celebrated as a national triumph.
Projects evolve into mega-projects when the scale increases, when the investment is huge and the complexity vast, when they have a long-lasting effect on a country’s economy, society and environment. It was clear from the beginning that by any metric you wanted to use, Sochi was going to be one of the biggest mega-projects Russia had ever undertaken.
Once the decision had been made that the Olympic Games would be held there, it was agreed that Russian Railways would be responsible for constructing the railway network, which was hardly a surprise. Our company was already widely recognised for its ability to complete challenging infrastructure projects, having earned this reputation through the construction of the Ladozhsky railway station in St Petersburg, the Severomuysky Tunnel on the Baikal Amur Mainline (BAM), and the high-speed Sapsan train between Moscow and St Petersburg, to name just a few. What was somewhat more unusual was that, after a certain amount of consideration in the Ministry of Transport, they decided that Russian Railways should also be responsible for the parallel automotive road construction.
Russian Railways were involved in the development plans from the beginning, our brief steadily expanding to include roads and railway lines (notably the creation of the main passenger artery for the Sochi Olympics, a combined road–rail connection between Adler and Alpika, as well as redeveloping the 90-mile-long Tuapse–Adler rail line, which in places was already nearly a hundred years old and only single track); modernising existing train stations and, where necessary, building new ones from scratch. We were also tasked with creating a shuttle service between Sochi and Sochi airport, and developing high-speed electric trains. As each of these new tasks arrived we created a plan for them which was then submitted for approval to both the government and Russian Olympic Committee.
Everything had to be ready by 2012, so that test games and other events could be held in all the stadiums throughout 2013. It helped that I had a useful quantity of personal experience in this field, notably with the construction of the port complex at Ust-Luga. But, of course, every endeavour on this scale is different. For instance, the Ust-Luga development was conducted against a mixture of apathy and hostility – you could be forgiven for feeling sometimes that most people were unaware that the work was taking place, and of the small proportion of people who did know about it, an even smaller proportion cared whether it was a success – whereas from almost the first day of our involvement in Sochi, there was widespread interest at every level of Russian society. Nevertheless, we did not need to be told that enthusiasm by itself is not sufficient to build railways or stations; there was no doubt that the task ahead of us would be unprecedentedly challenging and complex.
Perhaps there is an ‘ideal’ mega-project out there, an endeavour characterised by a limitless budget, a generous deadline for completion, compliant local authorities and a landscape free of geographical bear traps, but I have yet to see one. Far more commonly, one sees substantial delays, or budgets that spiral out of control – Eurotunnel and the new Berlin airport are good examples of this. Generally, as a CEO in these situations, you find yourself acting as a kind of risk-assessment manager as much as a strategist. Your role, insofar as it is possible, is to anticipate the problems that the project you are responsible for is likely to run into, and to then take steps that will allow you to cut them at their roots (ideally), or (more realistically) cope with them if they grow. These issues might, very broadly, be divided into three categories: geography, humanity and uncertainty.