Construction of Sochi power plant cancelled

Construction of the 367MW Kudepstinskaya thermal power plant in Sochi, Russia, has been cancelled, according to market research and consulting company PMR.

The project was intended to be part of the city's preparations for the 2014 Winter Olympics, but PMR said its construction had been delayed for various reasons, from the changing of the general contractor after TGK-2 quit the project, to the protracted issue of the state expert appraisal, and the absence of an energy delivery contract. Local residents and environmental activists also protested against the development.

Back in April, the new contractor GazEnergoStroy said the first foundations for the power plant would be ready in June this year. Now, PMR reported that Russia’s Ministry of Energy has reduced the Sochi's electricity consumption forecast by 40%, from 1,380MW to 850MW – essentially making the plant redundant.

PMR said GazEnergoStroy had already invested RUB4.6 billion (€115 million) from the project’s RUB22 billion (€550 million) budget. GazEnergoStroy has been offered two alternative locations for the plant – Grozny or Novorossiysk.

The news comes amid reports of soaring costs for the 2014 Winter Olympics. Russian opposition politician Boris Nemtsov has alleged that corruption among officials and businesses working on the Sochi Olympics has added US$30 billion (€22.6 billion) to the cost of constructing venues and infrastructure.

He said the original budget of US$12 billion (€9 billion) has rocketed to US$50 billion (€37.6 billion), making the games the most expensive Winter or Summer Olympics ever.