Ski Resort Fever: How Billions Are Made by Destroying Mountain Wildlife Refugia?

New information has emerged about the authorities’ plans to “develop” our country’s mountain forests for the construction of ski resorts. Let me remind you that earlier they tried to adopt a bill allowing clear-cutting of protective mountain forests for the sake of resorts, but under public pressure they failed to push the initiative through! Then they resubmitted it, and on the very last day of the public-comment period thousands of votes suddenly appeared, allegedly in support of destroying the mountain forests.

This is hardly surprising when you realize that the bill was drafted by the Ministry of Economic Development—and that very ministry has been appointed the operator (i.e., it controls) the legislative-initiatives platform.

So, the struggle continues! To secure the “necessary” backing for ravaging the mountain refuges of wildlife, officials decided to speak in person before the Federation Council.

At a Federation Council round table on the role of civil-society institutions and public authorities in tourism development, Georgiy Grusha, Director of the Department for Tourism-Project Implementation at the Ministry of Economic Development, declared:

“Together with our colleagues from the Ministry of Natural Resources we are working through issues of building-height limits and expanding the list of sites for construction … We are drafting a law on ski resorts that would define the range of such facilities and provide certain economic opportunities for their implementation, including on forest-fund lands.”

What is striking here is that the round table was “devoted to the role of civil-society institutions”—yes, that is both funny and not funny at the same time! We, comrades, form a civil-society institution, yet our opinion is not only disregarded but deliberately ignored. This is especially interesting in light of the possible “ballot-stuffing” of votes supporting the destruction of mountain forests on the final day of the public discussion.

So, what exactly did Mr Grusha say?

It is very simple:

• A bill on ski resorts is being prepared to grant “economic opportunities” on forest-fund lands. In essence, this is about deliberately reducing the conservation status of our nation’s protected areas for the benefit of big business! Ancient forests will be cut, and refugia—natural recovery nodes for biological systems—will be destroyed.

  
  

  In other words, business interests are being placed openly above nature protection! And to make sure people “don’t get in the way of making money,” the next step will be a federal law on ski resorts.

  
  

• I presume the bill he refers to is precisely the one we are opposing—legislative initiative No 155253.

  
  

  Together with officials from the Ministry of Natural Resources they are already discussing expanding infrastructure in mountain ecosystems. Thus, the entire program for developing protected areas is being lobbied by two federal agencies: the Ministry of Economic Development and the Ministry of Natural Resources.

  
  

  And now they publicly state that they are drafting a ski-resort law in order to abolish numerous restrictions at the federal level and launch large-scale exploitation of wildlife refuges!

You can also gauge how influential this lobby is—the plans are announced personally at a Federation Council round table. Naturally, no one there raised questions or objections, which I can only interpret as total support from the governing system.

Let me briefly explain how building ski resorts enables the “laundering” of budget money.

As I mentioned earlier, they themselves stated that even at the bill-drafting stage they plan to master more than 300 billion rubles for the construction of over 260 resort facilities.

The point is that the state allocates tourism-development funds from the national budget, and local officials invent ways to “efficiently” launder that money.

Building ski resorts is the most lucrative field. Mountain conditions require very expensive construction technologies: seismic-resistant structures, insulation, anti-corrosion coatings (especially concrete mixes), and costly equipment for slope preparation.

Simply put: imagine you have 100 billion rubles of earmarked budget money and the state tasks you with “boosting tourism indicators.” Instantly, officials up and down the chain start devising how to implement projects at the highest possible cost with the least effort. Ski-resort infrastructure is the “golden option” because it allows colossal sums to be poured into one concentrated cluster—and then shamelessly skimmed off.

The scheme is simple: the cost of work and materials is assessed with a hefty markup, while the true cost is understated in the estimates. The state is billed at two to three times the real price. Fake contractors, a common practice here, win tenders at inflated rates. In reality, the cheapest materials are bought, while the paperwork lists premium, high-grade supplies.

Throughout construction and its preparation huge sums are written off for work that was never performed or only partially done. I know of cases where a “deep foundation with anti-seismic reinforcement” was documented, but in fact a simple concrete slab was poured, and bogus quality-control papers were signed off!

Labor costs are also slashed: the main contractor hires a subcontractor, who hires another, and so on through three to five layers—each layer taking a cut for “organizing” the work. Ultimately, only 30–40 percent of the budget reaches the actual workers.

Ski-resort projects are attractive precisely because construction costs are astronomically high—few other sectors can absorb so much. Officials introduce pricey avalanche-protection systems, artificial lakes for snowmaking, slope-stabilization measures, new snow-generation systems, and so on ad infinitum.

Even more interesting are the contracts for “research work,” such as “slope-stability assessments” or “snow-mass monitoring.” Each such service naturally costs tens of millions of rubles. Most of the time, these studies either copy old reports or are never conducted at all!

Money is also siphoned off through fake environmental-mitigation measures, which additionally whitewash officials in the public eye. Under the guise of “ecological compensation,” funds are allocated for transplanting rare plants, relocating animal populations to safe areas, or creating “green noise-barrier screens,” and so forth.

But!

The cash flow continues even after the resort is built. Formally, it may belong to the state, but management is transferred to a private company via tender. That company keeps writing off money for repairs, slope maintenance, snow-generation services, and so on.

One must not forget that building ski resorts also requires bringing in gas pipelines, electricity, and highways—each with separate state subsidies, and other officials personally take charge of “mastering” those funds. Remember Lake Baikal, where clear-cutting around the lake was pushed (and still is) by lobbyists linked to major tourism-cluster and road-construction businesses.

The practice of “laundering” state money via ski resorts in Russia is long-standing and has already enriched countless officials.

For example, in Sochi during preparations for the 2014 Olympics, the Audit Chamber found that the estimated cost of mountain-cluster facilities was overstated by at least 15.5 billion rubles! It also came to light that officials laundered money through supposed ecological-compensation schemes and other corruption mechanisms.

Later, the Prosecutor General’s Office reported to the Federation Council that it had opened 55 criminal cases and held 710 (!!!) officials accountable. In effect, a genuine organized-crime group formed around a single resort, siphoning off billions in budget funds—and this was officially confirmed after a series of scandals.

In the same 2013, the Interior Ministry opened a case over the theft of 275.3 million rubles by the management of AO “Resorts of the North Caucasus”: the money ended up in a Cypriot offshore intermediary during pre-design work for the future “Arkhyz” and “Elbrus” resorts.

And let’s be frank: even the most popular large-scale resorts in the country are unprofitable. Yet even here there are oddities! Consider: on 19 November 2014 the state compensated VEB with 6.4 billion rubles in losses on a loan to OAO “Krasnaya Polyana,”—the resort was unprofitable and could not generate a profit.

VEB is Vnesheconombank (now the State Development Corporation VEB.RF). It is not a commercial bank but was created solely to finance large investment projects in the country using state funds.

The odd thing is that VEB’s founder is the Government of the Russian Federation. It turns out that the state compensated itself 6.4 billion rubles for the resort’s debts?

Strange, of course. But let’s skip that; I’m no economist—perhaps I’m missing something!

Two years later, in May 2016, the state stretched the resort’s loan repayment to VEB over 25 years and cut the rate from 9 percent to 5 percent. By then the resort’s debt had reached 107 billion rubles, and the preferential-rate subsidy was a covert form of support.

The point is that even the most hyped “elite resorts” in the country are knowingly loss-making, and our state only keeps losing money for years—money that ends up in the pockets of officials and all those who loudly shout:

“Yes, yes! More resorts! More! More! And give some to us too!”

I perfectly understand that this is a “gold mine” for big business and officials—from ministers in agencies to rank-and-file executors.

But why do we, ordinary people, need another 260 unprofitable resorts in the country costing 300 billion rubles—especially at the expense of destroying WILDLIFE REFUGES?

Such is the situation surrounding Russia’s battered protected-areas system.

How should I finish this piece? What can I say so that everyone fully grasps the seriousness of the problem?

Perhaps I should simply quote Mr Grusha once more:

“Together with our colleagues from the Ministry of Natural Resources we are working through issues of building-height limits and expanding the list of sites for construction … We are drafting a law on ski resorts that would define the range of such facilities and provide certain economic opportunities for their implementation, including on forest-fund lands.”

No one intends to back down. And to secure the right to appropriate the rent of our protected areas, the bill’s authors are speaking before the Federation Council.

Spread this material! Tell people the truth. You are the only voice of the Russian Taiga.

(c) PAVEL PASHKOV