Russia has slashed over $500m from its official budget for the 2018 World Cup, according to the country’s news agencies.
The Russian government ordered 30 billion roubles ($560m) in cuts after slashing spending on hotels and infrastructure.
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No reason was given for the decision but Russia has been hit by an economic downturn worsened by Western economic sanctions over the crisis in Ukraine and a fall in the global price of oil.
The news agencies, quoting an order signed by Prime Minister Dmitry Medvedev, said total spending on the tournament would now be 631.5 billion roubles ($11.8bn).
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.
Mutko was quoted as saying that the building and renovation of stadiums would not be affected.
“We proceed from the fact that we’re working on a revision of the [World Cup] budget,” Mutko said.
“Of course it’s a question of optimising the preparations. We’re primarily taking out the excess hotels.”
More than half of the total budget will be funded by the federal government, which is providing 335 billion roubles ($6.25bn).
Russia won the right to host the 2018 tournament with a bid promising to build six new stadiums, hotels, training grounds and health facilities.
Costly airport renovations and high-speed rail links are also needed to ease travel between the 11 host cities.
Before the new government decree, the World Cup organisers had already axed plans to build 25 hotels, cut the number of training grounds and reduced the capacity of some of the venues to save on building costs.
Building materials are now being sourced locally from Russian providers because of the rouble’s decline against the US dollar in the past year, pushing up construction costs.
Meanwhile, Russia President Vladimir Putin is confident Russia will host the World Cup despite investigations into alleged corruption at football’s governing body FIFA and probes of how Russia and Qatar were awarded the 2018 and 2022 tournaments.
Nine high-ranking FIFA officials – including a vice president – were arrested in Zurich just two days before the FIFA Congress elected Sepp Blatter as president for a fifth term.
Blatter, however, announced four days later that he will step down from the post following an ‘extraordinary meeting of the Congress’ later this year that will elect his successor.
The bidding process for the 2026 World Cup has also been postponed. The decision on who hosts the 2026 tournament was due to be made in Kuala Lumpur in 2017.