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Russian audit chamber finds $88m world cup stadium design overspend

Cost control of World Cup stadium build and accusations of corruption is not an issue confined to Brazil. Russia’s state Audit Chamber has found that the  design work for its 2018 stadia has been over-priced by as much as 3 billion rubles ($88 million). 

The audit of seven stadiums found that the real value of the “design, planning and projection” works was 2.73 billion rubles ($80 million). Not the 5.82 billion rubles ($171 million) contracted in 2012-13.

The investigation into stadium design costs and budget was for the stadiums in Kaliningrad, Samara, Saransk, Volgograd, Rostov-on-Don, Yekaterinburg and Nizhny Novgorod.

The audit was conducted in conjunction with the Presidential Control Directorate following a directive in March 2013 to avoid increasing the cost of construction projects.

Seven state contracts to the value of 5.82 billion rubles were awarded. Five of the seven contract pitches were won by one construction company, FSUE (Federal State Unitary Enterprise ‘Sport Engineering’ – a company that has been no stranger to scandal) for stadiums in Volgograd, Rostov-on-Don, Nizhny Novgorod, Yekaterinburg and Saransk.

The largest overestimation of design work is at the stadium in Nizhny Novgorod, which should have cost an estimated  245.6 million rubles ($7.2 million ) according to the audit chamber’s cost consultants. The contract awarded was for 890.65 million rubles ($26 million), almost four times as much.

In Rostov-on-Don and Kaliningrad contracts of 892.9 million rubles and 849.7 million rubles were awarded – about three times higher than the state auditor believes the real costs should be.

The Ministry of Construction which awarded the contracts said that the audit did not take into account the type of build of stadia and that their calculations were based on standard construction rather than the scale of the projects that were being embarked on. Each stadium will have a number of unique and different elements and construction challenges. Even so, the disparity between cost estimates is high.

In principle it appears that it is possible for a revision of the cost of the existing contracts – either through the court system or through additional negotiation and changes in the agreement to existing contracts.

However, in cases of suspected corruption like the overvaluing of these contracts, then the case will have to be referred to the prosecutor’s office. If suspicions are confirmed a criminal case will be opened and the existing contracts annulled.

See the original story here.

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