From Bloomberg BusinessWeek:
… At $51 billion, the Sochi Games are the costliest ever, surpassing the $40 billion spent by China on the 2008 Summer Olympics. The suicide bombings in the Russian city of Volgograd on Dec. 29 and 30 have heightened fears of terrorism and given a renewed focus to security concerns as well as questions of cost. How the Sochi Games grew so expensive is a tale of Putin-era Russia in microcosm: a story of ambition, hubris, and greed leading to fabulous extravagance on the shores of the Black Sea. And extravagances, in Russia especially, come at a price.
Back in 2007, when Russia was bidding to host the 2014 Winter Olympics, the huge amounts it was willing to spend were a point of pride, an enticement meant to win over officials at the International Olympic Committee. Putin traveled to Guatemala City to give a rare speech in English, with even a touch of French, to the assembled IOC delegates, promising to turn Sochi into “a world-class resort” for a “new Russia” and the rest of the world. His pledge to spend $12 billion in Sochi dwarfed the bids of the other finalists from South Korea and Austria.
But since then, as costs have increased, Russian officials have grown less eager to boast about the size of the final bill. “In the beginning, money was a reason and argument for Russia to win the right to host the Olympics,” says Igor Nikolaev, director of strategic analysis at FBK, an audit and consulting firm in Moscow. “But it turned out we spent so much that everybody is trying not to talk about it anymore.” Dmitry Kozak, deputy prime minister in charge of Olympic preparations, has argued that the $51 billion number is misleading. Only $6 billion of that is directly Olympics-related, he says; the rest has gone to infrastructure and regional development the state would have carried out anyway. That may be true, though it’s hard to imagine the Russian government building an $8.7 billion road and railway up to the mountains without the Games.
Bent Flyvbjerg, an expert on what are called “megaprojects” at the Saïd Business School at Oxford University, says the costs for Olympic host nations have on average tripled from the initial bid to the opening ceremonies. In Sochi, costs rose nearly five times. That these Olympics should be the most expensive in history is all the more improbable, says Allison Stewart, a colleague of Flyvbjerg’s at Oxford, because compared with Summer Games, Winter Olympiads involve fewer athletes (2,500 vs. 11,000), fewer events (86 vs. 300), and fewer venues (15 vs. 40)…
Many, many more colorful details at the link.