Ismailov to Build 10% of Winter Olympic Hotels

Apr 07, 10 | 1:57 am

By Maxim Tovkailo, Anton Filatov and Anastasia Dagayeva / Vedomosti

Telman Ismailov, founder of the now-liquidated Cherkizovsky market who drew criticism for building a $1 billion five-star hotel in Turkey, will build almost 10 percent of the hotel space needed for the Olympics in Sochi.

The construction will cost him $300 million to $500 million, and it's not at all clear that he will be able to complete the construction, experts say.

Ismailov will help Sochi prepare for the 2014 Winter Olympics, said a source close to state corporation Olimpstroi, as did officials in the Regional Development Ministry and the Cabinet.

Ismailov is going to build hotels with about 4,000 rooms in Sochi and its vicinity. So far, Ismailov has only signed an agreement to invest in the city, and no projects have been confirmed. "So far there are no projects. It's still early to talk about the level of investment, but budget money won't be used," said the source close to the state corporation.

Ismailov is a colorful person, and his businesses are diverse. He valued the assets of his ACT Group at $3 billion in 2007. But last year he ran into some unpleasantness.

In May, he opened the five-star hotel Mardan Palace in Turkey, named in honor of his father Mardan, a project on which, experts estimated, he spent more than $1 billion. The opening was high-profile, featuring fireworks, Hollywood celebrities and the attendance of Mayor Yury Luzhkov and his wife.

But in June, Prime Minister Vladimir Putin spoke out against the contraband goods from China and Turkey that were being sold in Russia. "It seems as though there is a battle with contraband, but there have been few results. A result means prison terms, and where are the prison terms?" Putin asked.

Putin then gave an example of "one market" where more than $2 billion of such goods were being sold. "[The market] has not yet been destroyed, and it has no owner," he said.

It turned out that he was referring to Cherkizovsky, owned by Ismailov. In June, the market was closed and liquidated, and Ismailov left Russia. In December 2009, Putin said he saw nothing wrong with multibillion-dollar investments in Turkey, but that it was better to invest in Russia - to build, for example, a tourist complex in Sochi. He even made a joke about slow-witted investors that can't use maps - who, instead of building on the north shore of the Black Sea, built on the south.

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Source: The Moscow Times