Major Change in the “Russian Davos”

Translated from article taken from Neue Zürcher Zeitung, Saturday, 4 January, 2003
By Christoph Franzen

krasnaya-articleThe Development of a Rural Town into a Ski Resort for the Rich and Famous

Russia’s president, Vladimir Putin, plans to re-develop the town of Krasnaya Polyana situated in the Southwest Caucasus into a world class resort, a “Russian Davos” says the Kremlin. Private enterprise and the government are prepared to invest up to one billion dollars.

The trip up to the top of Aibga on a series of four old chairlifts was slow but worthwhile. Fresh powder snow several meters deep, a long, steep, north-facing slope for the skier and the view to the South towards the Georgian Mountains and the Black Sea are simply breathtaking. A ski slope with ocean view, a one of a kind combination, which has not gone unnoticed by Vladimir Putin when skiing in the Caucasian Resort Krasnaya Polyana for the first time two years ago.

Putin has big plans for this rural town with its 300 inhabitants. The Russian resort slated for development is only one hour from the holiday Mecca Soschi on the Black Sea. During the next decade, up to 40,000 tourists, mostly Russians, are expected to visit this ski resort which encompasses an area larger than the French Trois Vallées. The resort will also be offering summer skiing. According to the promoters, the adjacent Soschi will become the third capital in this giant Empire after Moscow and St. Petersburg. Even hosting the Olympic Games are more than just a pipe dream for the promoters and the media already speculates about hosting the WEF, currently held in Davos.

These dreams could easily be shelved if it weren’t for president Vladimir Putin who puts sports, especially winter sports, as his first priority. According to the magazine “Itogi” the ski enthusiast Putin called an official meeting with the Head of the Olympic Committee, Leonid Ttjagatschow to determine the feasibility of developing Krasnaya Polyana as a tourist destination. At the same time, the financial giant Interros contracted the renowned Canadian firm Ecosign to prepare a feasibility study. Their president Paul Matthew expressed a great deal of enthusiasm: ” This is a world class area. One of the most beautiful places I have seen.”

A One Billion Dollar Investment

The Krasnaya Polyana region offers a variety of pistes ranging from beginner to expert. Another advantage is the easy access to the airport in Soschi, which can be reached by car in less than one hour. According to the committee, the transformation of this farming town into a Russian Davos will require an investment of approximately one billion dollars. Private investors would be responsible for the skiing facilities and the government would build the infrastructure for transportation and energy (gas and electrical lines), according to the newspaper ‘Komersant.” At this time, the development plans from the Moscow ministries and the reality in Krasnaya Polyana are still worlds apart. This is already noticeable when driving to the resort from the airport in Soschi. Even though the driver manoeuvres the Lada easily through the narrow valley on a street which changes from bad to worse, one cannot help but feel a little leary. “Sure, sure, says the driver, once in a while parts of the road break off”. However, there is hope. The construction of a 2.4km long tunnel has been completed and the wider parts of the road will soon be open for cars.

The stretched out town also shows signs of change. Farmers’ pigs still roam freely, but look out of place in the midst of the modern restaurants which have been built in Krasnaya Polyana during the last few years. Searching for a hotel can still be a challenge. According to the manager of the fancy Chalet-Hotel ‘Haselnuss-Hain’ he is only allowed to rent his rooms to members of the security service PSP – for $50 per night.

Expensive Transportation

The Valley Station of the existing ski resort is situated 5 km outside the town. A parking area, a ski shop, a few wooden shacks either for ski equipment rentals or snack bars and even a Tirol style Après Ski bar are available to the guests. But the Jamaican Reggae music doesn’t fit the mood and the bartender drops one of the vodka bottles while juggling. From the valley station it takes 4 chairlifts to reach the Aibga Ridge. The first of these fixed grip (and therefore slowest) chairlifts was built in 1993 with a capacity of 600 persons per hour and yet the price of a day ticket is 425 Roubles ($13). This is equivalent to the weekly earnings of a lift operator.

The director of Alpika Service, Igor Borisowisch, reacts rather surprised when questioned about the high prices. “We have debts to pay back” he answers from behind his meagre desk. In the corners of the room among ski boots, are several rolls of paper: plans for the big future. The 4 chairlifts will be replaced with an 8-passenger gondola for an estimated 20 million dollars. Private investors, together with the city of Soschi, as well as the Krasnador region are supposed to pay for it. Igor is a conservative thinker. To him the billion-dollar Ecosign project is hardly feasible at this time. “Who will invest that much money? First we need a functioning sewer system in the town – then the dreaming can continue”. The infrastructure of Krasnaya Polyana is in a bad state. The town’s sewage system is very basic. Most of the raw sewage goes into the narrow river which runs through the town on its way to the sea. The swimming pools, golf and tennis facilities, movie theatres, dancing and conference centres proposed by Moscow are nowhere to be seen. The fenced and rather shabby looking wooden houses are still representative of the town. “If everybody just builds a 5 star hotel and doesn’t contribute to the general infrastructure we will never have a Russian Davos”, says Mayor Vladimir Nikolaiowitsch, who is sitting in front of a giant Russian flag behind which hangs the obligatory portrait of Putin. It is still unknown how much the state is willing to invest and whether big firms like Gasprom and Resneft want to be part of this project. When Soschi bid for the 2002 Olympic Games, the entire budget for the region was estimated at $3.5 billion.

Skepticism among the Locals

Not all locals are enthusiastic about this development. The best building lots are being offered to the people in Moscow, complain the town people. Furthermore, the tourist trade will bring more crime to the region. The area around Krasnaya Polyana was already well known as a summer destination for the people from St. Petersburg and the elite of Moscow during the time of the Czar. In 1927, “the basis for the proletarian tourism” was established. Still, the locals have to get used to a significant change. “This entire area is slated for hotel development”, says Nikolai and points to an open field adjacent to the hamlet Esto Sadok, where brown mares are trotting through the snow.

The region truly is of breathtaking beauty, with a variety of alder, beech, chestnut and oak trees some more than a thousand years old. During the summer, alot of tourists from Soschi come here to cool down while hiking, fishing or river rafting. Environmental concerns will hardly halt the development of a top ski resort, especially not in a country whose government opened the borders for the disposal of 204,000 tons of foreign nuclear waste. The main problem is the financing. During the first phase, the government is supposed to invest 50 million dollars mainly for streets, sewage treatment, gas and electrical lines. Should everything go according to the wishes of the president’s committee, the world class resort will be completed within 15 years. The natural prerequisites are in place, according to the president of Ecosign, Paul Mathews, and his plans could be implemented as well. According to Paul Mathews, in Russia it is easier to develop a tourist area than to build microprocessors.