FT.com / World / UK - London Olympics body offers deal on cost overruns
FT.com / World / UK - London Olympics body offers deal on cost overruns: "London Olympics body offers deal on cost overruns
By Roger Blitz in London
Published: November 22 2006 22:11 | Last updated: November 22 2006 22:11
The body set up to deliver the London Olympics in 2012 promised on Wednesday that despite admitted cost over-runs on the project it would not need to call on government resources any more.
David Higgins, chief executive of the Olympic Delivery Authority, offered the UK government that in return for a �5bn ($9.5bn, €7.4bn) funding package, the budget would not overrun even though the games were almost six years away. “The costs are not going to go up on an exponential basis,” he told a regeneration conference in London.
The reputation of London 2012 officials and ministers in the government of Tony Blair, prime minister, have been damaged by recent revelations about the growing cost. Ken Livingstone, London’s mayor, said on Wednesday that “everything is going exactly to plan” and that the games would make a profit. [ When the budgets failed to include VAT how can anyone have confidence in this statement. Moreover the original budget was clearly incorrect - Barrie Segal editor]
The �5bn figure is �2bn more than the initial �2.4bn cost of construction and security in the run-up to the games and �1bn for regeneration presented to the International Olympic Committee by bid organisers two years ago. But the �5bn figure does not include money the government must allow for value added tax costs and contingencies.
Tessa Jowell, sports minister, earlier this week blamed higher steel prices and transport costs for a �900m rise to �3.3bn in the predicted cost of building the Olympic Park in east London.
Concern over the escalating costs has mounted after Jack Lemley resigned last month as chairman of the body responsible for creating the infrastructure for the event. Mr Lemley told a US newspaper the slow progress of the project and concerns over budgets were behind his decision. Britain has a history of delays and cost overruns for projects such as the Millennium Dome, the centrepiece of its millennial celebrations, and the new Wembley sports stadium."
By Roger Blitz in London
Published: November 22 2006 22:11 | Last updated: November 22 2006 22:11
The body set up to deliver the London Olympics in 2012 promised on Wednesday that despite admitted cost over-runs on the project it would not need to call on government resources any more.
David Higgins, chief executive of the Olympic Delivery Authority, offered the UK government that in return for a �5bn ($9.5bn, €7.4bn) funding package, the budget would not overrun even though the games were almost six years away. “The costs are not going to go up on an exponential basis,” he told a regeneration conference in London.
The reputation of London 2012 officials and ministers in the government of Tony Blair, prime minister, have been damaged by recent revelations about the growing cost. Ken Livingstone, London’s mayor, said on Wednesday that “everything is going exactly to plan” and that the games would make a profit. [ When the budgets failed to include VAT how can anyone have confidence in this statement. Moreover the original budget was clearly incorrect - Barrie Segal editor]
The �5bn figure is �2bn more than the initial �2.4bn cost of construction and security in the run-up to the games and �1bn for regeneration presented to the International Olympic Committee by bid organisers two years ago. But the �5bn figure does not include money the government must allow for value added tax costs and contingencies.
Tessa Jowell, sports minister, earlier this week blamed higher steel prices and transport costs for a �900m rise to �3.3bn in the predicted cost of building the Olympic Park in east London.
Concern over the escalating costs has mounted after Jack Lemley resigned last month as chairman of the body responsible for creating the infrastructure for the event. Mr Lemley told a US newspaper the slow progress of the project and concerns over budgets were behind his decision. Britain has a history of delays and cost overruns for projects such as the Millennium Dome, the centrepiece of its millennial celebrations, and the new Wembley sports stadium."
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