Following discussions between the French and Russian presidents before the G-8 summit in Deauville at the end of May, it emerged that an agreement had been made between the two governments that assured France would offer money and expertise to the resort scheme for the Northern Caucasus.

Presidents Nicolas Sarkozy and Dmitry Medvedev released a joint statement to confirm their cooperation for the development of the ski resorts, as well as the development of beach resorts on the Black Sea and the Caspian Sea. The statement declared that the two presidents had “decided to make this tourist development project in the Northern Caucasus a priority theme of the strategic partnership of the two countries.”

The joint statement outlined that co-operation would centre around creating a legislative and regulatory framework based on French expertise, providing French engineering resources and business models to stimulate investment, and establishing collaborations between Russian and French institutional and economic players.

It was reported in mid-July that France would be providing $1.2bn, mostly in ski lift equipment. It seems that Russia has made no objection to the requests of French investors for a repayment of credit should the threat of terrorism become a problem.

World leader

France is said to be providing and installing all the equipment for skiing in the resorts; however, the motivation behind French involvement is likely more than just commercial. Its participation in this extensive and ambitious project would allow the country to further its reputation as a world leader – arguably the world leader – in developing tourism, particularly in terms of both ski and beach resorts. It would also advertise France’s know-how and capabilities in terms of technology and implementation.

Northern Caucasus Resorts Company (NCRC) and Caisse des Dépôts et Consignation (CDC) signed a memorandum of understanding on June 17 at the St Petersburg Economic Forum to establish a joint venture to create a management company to oversee the investments and infrastructure developments on this project.

“France’s experience of developing the French Alps makes it a useful model for us, and a joint venture with CDC brings in the first major European investor to the project, so it’s a big step,” says Alexey Nevskiy, director general of NCRC.

Project implementation

The statement released by Mr Sarkozy and Mr Medvedev said: “The Caisse des Dépôts et Consignations Group, on behalf of France, and the Northern Caucasus Resorts Company, on behalf of the Russian Federation, are responsible, each in their own area, for mobilising the French and Russian actors concerned in implementing the various aspects of this co-operation.”

It appears that French involvement has already attracted other interest as NCRC has now also entered into agreements with leading Austrian companies, assuring their full participation in the project in terms of design and construction. Austrian expertise, as one of the most highly developed skiing and tourism countries along with France, is surely also invaluable in bringing to fruition the project.