Sochi Olympics—What’s the Cost of National Prestige?

The Sochi Olympics was an example of project costs running out of control; so much so that the final price tag (estimated to be more than $50 billion), dwarfed the costs of every other Olympic Games to this point in time. In addition to picking a questionable, sub-tropical location for the Games, from the very beginning, the process of developing the site was subject to meddling from politicians, including President Vladimir Putin. Another major cost to the final price tag was related to charges of wide-spread corruption, as sub-projects for the Games (such as infrastructure, buildings, and roads) ended up with highly inflated price tags. This is a great case for general class discussion as we consider the purpose for Olympic Games, the challenges of cost control with critical deadlines that must be adhered to, and the fact that costs are rising for Games to the point where in 2017, Rome, Budapest, and several other cities withdrew their bids to host the 2024 Olympics because they could not trust the final costs and could not justify the value they would gain versus the costs of the project.

Questions

1. Consider the following statement: “Government-funded projects intended to serve as ‘prestige projects,’ such as the Sochi Olympics, should not be judged on the basis of cost.” Do you agree or disagree with this statement? Why?
2. Project success is defined as adherence to budget, schedule, functionality (performance), and client satisfaction. Under these criteria, cite evidence that suggests the Sochi Olympics project was a success and/or failure.
3. When a project has a “hard gate,” like being ready on time, how does that affect normal success criteria? Is it fair to judge a project with a critical completion date by normal project success standards? Why or why not?
4. Consider the problems with the Rio Olympics sites that quickly occurred following completion of the 2016 Summer Games. Access the internet to find evidence of the current state of the Sochi Olympic site. How is it being used and what are the current problems and opportunities for Sochi?