Russia cuts budget for 2018 World Cup by over $500m

MOSCOW - Russia has slashed over $500 million from its official budget for the 2018 World Cup after cutting spending on hotels and infrastructure.

The government is curbing most areas of public spending as the economy contracts due to the low oil price.

An order signed by Prime Minister Dmitry Medvedev and published Monday cut the total World Cup budget by 29.2 billion rubles ($544 million) to 631.5 billion rubles ($11.8 billion).

Sports Minister Vitaly Mutko revealed in April that the government had decided to slash the number of luxury hotels, warning they could lie empty after the tournament. That reduction in the number of hotels was confirmed in law Monday, while various projects to improve drainage were also removed from spending plans.

"We're optimizing and cutting expenses," Mutko told Russian agency R-Sport. "First of all we're removing the excess number of hotels."

FIFA denied the cuts would mean a shortage of hotel rooms for fans in 2018.

"As any other entity with operations in Russia, FIFA keeps a close eye on the financial situation in Russia," FIFA said in an emailed statement.

"Based on the information provided by the local organizing committee and the Ministry of Sports, the revisions to the project budget will not impact on the delivery of general infrastructure required ... including the provision of sufficient accommodation."

Mutko said the budgets for building the stadiums had been left intact. Over the last year, stadium budgets have come under strain after a fall in the value of the ruble made imported equipment and materials more expensive.

Russia has also reached a deal with FIFA to cut the number of training bases provided for the teams from 48 to 36, or three per stadium, Mutko said.

"With FIFA, we were able to optimize the list of hotels and bases for hosting national teams," he said.

It was not immediately clear which training bases would be cut. A preliminary list of training bases raised eyebrows earlier this year after it included locations in the volatile regions of Chechnya and Dagestan, where Islamist insurgents operate. Russian World Cup organizers have said the areas are safe and would be well secured during the tournament.

More than half of the total budget will be funded by the federal government, which is providing 335 billion rubles ($6.25 billion). Other funding sources include regional governments, state-run companies and private investors.