Russia & Singapore Secure Joint Venture to Develop Airports for Sochi 2014
November 1, 2011
Russia and Singapore have teamed up for a joint business venture to develop airports being used for the Sochi 2014 Winter Olympic and Paralympics Games.
Russian business tycoon Oleg Deripaska, Singapore’s Changi Airport and Russian state lender Sberbank announced a 50-30-20 per cent division of shares in the venture, with Sberbank investing $120 million and Changi contributing $200 million to the project.
Deripaska’s Basic Element Group is investing $500 million and are hoping to capitalise on the cluster of airports in the Black Sea region, including in Sochi and Krasnodar.
As well as hosting the 2014 Winter Olympics and Paralympics, Sochi is staging Formula One in the coming years and games during the 2018 World Cup, while both Krasnodar and Rostov are also set to host World Cup matches, meaning the region will require a significant expansion of air capacity for that tournament.
With total air passenger traffic estimated to beat five million in 2011, upgrading airport infrastructure is a key part of the region’s regeneration, with an exciting decade of sport ahead.
German Gref, the chief executive of Sberbank, said: “It is a financial investment for us. We do not manage airports and do not intend to. We see great potential for value increase in Krasnodar region airports, especially in view of the upcoming 2014 Olympic Games in Sochi, as well as the World Cup that Russia will be hosting in 2018.”
Andrei Yelinson, deputy general director of the Basic Element Group, added: “We are planning to allocate our current airport assets of Sochi, Krasnodar, Gelendzhik and Anapa as a form of investment in the JV. Our stake will come to 50 per cent plus one share, the Sberbank Investment is 20 per cent minus one share and that of Changi Airports is 30 per cent.”