Nation still faces many challenges in finding $32 billion for infrastructure improvements to host European soccer championship.
After a celebration on Sept. 14 in Dnipropetrovsk to mark the renovation of a soccer stadium that will host matches for the Euro 2012 championship, Ukrainian officials are upbeat that their country is on track to cohost the major tournament with Poland.
The stadium is owned and was reconstructed with the financial backing of billionaire Ihor Kolomoiskiy, one of several rich and soccercrazed businessmen who are pumping money into new stadiums and other preparations.
Cohosting the major tournament is expected to cost Ukraine $32 billion, with roughly twothirds coming from private sources such as Kolomoiskiy. Ukraine has high hopes that the popular, weekslong spectacle will pay off big – in infrastructure improvements, such as better hotels, roads and airports, as well as increased tourism.
However, significant challenges are still ahead, including the massive task of building a brand new stadium in Lviv within three years and reconstructing airports in five cities earmarked to host the games.
A Sept. 16 Reuters report suggested the Union of European Football Associations, Europe’s soccer governing body also known as UEFA, will rebuke both Ukraine and Poland again next week over slow progress. But the organization, at its Sept. 25 meeting, is expected to stop short of withdrawing the two nations’ designation to stage the event.
Earlier this year speculation was rife in domestic and foreign media that Ukraine may lose the opportunity to cohost the 2012 European football finals. The bad press resulted in a host of other countries, including Scotland, Ireland, Italy and Germany, jumping at the prospect of taking Ukraine’s place.
The rumors subsided after inspectors from UEFA visited Ukraine late last month and noted that significant progress had been made. For example, a shopping mall that was being built next to the championship game venue, Kyiv’s Olympic stadium, is finally in the process of being demolished. And in recent weeks, the reconstruction of this massive stadium, capable of seating some 80,000 fans, kicked off.
Still, Euro 2012 skeptics argue that the current standoff between President Victor Yushchenko and Prime Minister Yulia Tymoshenko could influence a final verdict from UEFA’s executive committee.
Deputy Vice Premier Ivan Vasiunyk and Hryhoriy Surkis, the president of the Football Federation of Ukraine, claim that this is nonsense.
Vasiunyk and Surkis gave a joint press conference on Sept. 15, three days before the Ukrainian delegation travels to Switzerland to present the government’s progress report to UEFA. “In fact, Euro 2012 will set the political climate, not vice versa,” Vasiunyk said. “It will be a source of stability…the progovernmental coalition and the opposition all speak in one voice when it comes to Euro 2012.”
Before the football tournament is held, Ukraine is scheduled to undergo parliamentary and presidential elections. “But the president of the football federation will remain the same for the next four years,” Vasiunyk said, referring to Surkis.
Surkis pointed out that Euro 2008 went ahead in Austria despite a “politically stormy season” that resulted in the collapse of that country’s governing coalition days after the championship ended.
“Work is being done and it needs to be accelerated,” said Dirck Smits van Oyen, who developed the proposal for Ukraine and Poland to host the tournament.
Smits van Oyen, now running a Kyivbased consultancy that aims to help foreigners navigate unchartered investment waters ahead of the football championship, was upbeat.
“There is no reason to fear a reverse decision,” Smits van Oyen said. “The political situation does not help right now, but UEFA ultimately doesn’t care if there are snap elections. What is important is that there is a functioning government in place, allocating the necessary budget. This is not happening sufficiently. Projects are not being implemented.”
There are also fears that Ukraine may end up hosting only a quarter of the 32 matches in June 2012, a blow to tourism revenue. During Euro 2008, held earlier this summer, the average visitor spent more than three nights and 1,000 euros in Austria and Switzerland, according to UEFA. Austria’s hotels saw more than 8 million overnight stays during the month of Euro 2008.
A study conducted in Portugal two years after it hosted the Euro 2004 championship found that the number of tourists increased by 10 percent every year since then.
“Portugal was already a popular tourist destination,” Smits van Oyen said. “With Euro 2012, many tourists will discover Ukraine and Poland for the first time, so the impact will be much bigger.”
However, concerns about infrastructure and stadium readiness are expected to be on the agenda when UEFA’s executive committee meets in Bourdeaux, France on Sept. 25.
Prior to a UEFA inspection trip in July, Ukrainian soccer officials had said that Donetsk, Dnipropetrovsk and Kharkiv were furthest ahead in preparations. Dnipropetrovsk has already opened a refurbished stadium and reconstruction of stadiums in Kharkiv and Donetsk are not far behind. Most problematic, according to experts, are the state of the stadiums in Kyiv and Lviv.
After a year of legal wrangling, the reconstruction of Kyiv’s stadium has begun. A German company, GMP von Gerkan, Marg und Partner, and the Kyivmiskbud holding company are removing the unfinished shopping center beside the stadium that is scheduled to host the final match of the tournament. The plans also include reconstruction of the stadium’s lower level to be complete by June 2010.
Another big concern is the lack of hotel space in Kyiv and other cities. But investors are making progress in developing brand new capacity.
UEFA expects 3,000 fivestar rooms and 4,500 lesserquality rooms in Kyiv. While Ukrainian officials admitted the shortcoming, they pointed out that the Fairmont and Intercontinental chains will together provide more than 500 fivestar rooms, while 30 new hotels will be built and 20 existing ones will be renovated by 2012 – more than enough to fulfill the requirement.
There is also concern that Donetsk is 1,500 fivestar rooms short.
The situation in Lviv is even worse, because there is no stadium yet. There is an empty field where a 30,000 seat stadium should be by March 2010. The city decided it will finance construction with municipal bonds, instead of looking for outside money. In early August, the city council earmarked Hr 80 million for the stadium’s construction.
In terms of stadiums, Ukraine is further ahead than Poland, but Smits van Oyen said that both countries will meet the requirement on time.
Lviv’s other headache is its tiny airport. The World Bank said it will pay for its overhaul. The business plan is being developed by an international consortium comprised of Corporate Solutions, ScanAvia A/S, the Ukrainian State Aviation Service and Lviv City Council.
The verdict on Lviv and other cities will be delivered during the Sept. 25 executive committee meeting in France. Ahead of that meeting, Polish President Lech Kaczynski and Prime Minister Donald Tusk will meet with their counterparts in Ukraine. There are fewer concerns about Poland’s abilities, because the European Union is expected to provide the funds for developing infrastructure in the country.
Smits van Oyen said that in Ukraine, 80 percent of the investments are expected to come from the private sector and the balance from state coffers. He said that institutional investors such as the World Bank and European Bank for Reconstruction and Development will provide support.
Anton Usov, communications adviser to the EBRD, said that the bank is not looking into providing loans specifically for Euro 2012, but is seriously considering a number of projects for infrastructure development.
“We are certainly looking into ways to fund infrastructure, but not necessarily for Euro 2012. We are interested in projects that will work for many years after,” Usov said. “All the host cities from Lviv to Donetsk badly need major infrastructure upgrades.”
The EBRD is looking to finance airports, bus terminal, roadways and railways. They are predominantly stateowned projects, and account for a significant share of the roughly $25 billion investment needed to prepare for the tournament.
