|Russian regions will struggle to fund 2018 World Cup, says S&P
|Most of Russia's regions will have a tough time coming up with the cash required to host the 2018 football World Cup because of the country's economic slowdown, Standard and Poor's has warned.
"In our view, most of the host regions will find it difficult to reallocate or generate sufficient funds for the World Cup due to an expected weakening of regional budgetary performance as a result of slowing economic growth," the global ratings agency said in a report.
The report said the regions had longstanding infrastructure problems that needed to be handled before money was spent on stadium construction and other high-profile improvements.
"Rapidly deteriorating infrastructure is another reason explaining the regions' lack of capital flexibility, in our view," the report said.
"In addition to routine capital maintenance that local and regional governments have put off but must now address, the 2018 soccer World Cup especially will strain the finances of most of the 11 Russian host cities."
Russia won the right to host Eastern Europe's first World Cup over favourites England after promising to invest billions of dollars in building new stadiums and refurbishing airports and hotels.
Several cities such as the western exclave of Kaliningrad still need to build stadiums while others such as Samara and Saransk in central Russia have stadiums that are in serious disrepair.
Yet Moscow has still not spelled out how much of that money will come from the federal budget and how much the regions will have to finance themselves.
Russia has already binned plans to extend its high-speed rail network to the Ural Mountains because of the overwhelming cost.
President Vladimir Putin has vowed to invest widely ahead of the World Cup, focusing on projects that will bring long-term benefits to regions that have been largely ignored by Moscow in the past.
But Standard and Poor's said: "Our estimates suggest that even if the federal government is generous in its support, the regions affected will have to borrow and make significant budgetary adjustments that are likely to undermine their credit quality."