Now that London has beaten the odds and won the Olympic Games, the small matter of building £8bn worth of facilities is getting under way.
Last Friday morning, a day after the terrorist attacks on London had silenced triumphant talk of Olympic victory, the London Development Agency emerged quietly defiant. “This will not change our plans,” said a spokesperson. “We have contractors queuing up ready to start work. More than 200 leading construction companies have submitted formal expressions of interest, and we will be working with Transport for London to take work forward.”
The work is the tendering and early stages of development that must be completed before the creation of a dedicated Olympic Delivery Agency in six months. It is the first of many challenges for the Olympic organisers and the construction industry, but with a programme of tenders issued and a rolling process of contract awards already begun, the LDA is setting a good pace.
Planning permission and early work
The LDA secured planning permission for its Olympic masterplan from the councils of Hackney, Waltham Forest, Tower Hamlets and Newham in September. While the bid process was under way, the agency began preliminary work on the construction process, including employing engineer Buro Happold to get the Olympic Park site ready for construction, and using consultant Mace and architect HOK Sport to develop its proposals. Transport for London also began the necessary upgrades to Tube networks, a process that would have gone ahead regardless of the outcome of the bid. Now London has been confirmed as the host city, deals with contractors that signed during the bid phase will be retendered. The only confirmed contract so far is the appointment of Zaha Hadid to design the £70m Olympic aquatic centre in the Olympic park in Stratford. Everything else is up for grabs.
Tenders and land acquisition
Prior to the Olympic decision being announced, the LDA had already issued tenders for:
- programme managers to oversee the entire project
- designers for the Olympic park and infrastructure (excluding venues)
- the designer for the £37m Olympic velodrome
- the designer and contractors for demolition and remediation work.
Shortlists for the first two will be announced later this month; the others will be made public in August. By the end of this month the LDA will appoint a contractor for a £200m scheme to run power lines underground in the Lea Valley. Forthcoming tenders include the designer for the Olympic stadium, to be advertised in October.
About 80% of the land needed to stage the Games is already under public ownership; the LDA now needs to work to acquire the remaining 20%.
The Olympic Delivery Agency
Within the next two weeks, a company called the London Organising Committee for the Olympic Games (LOCOG) will be set up to organise and manage the Games themselves, but this will not take control of the construction process. That will be handled by the Olympic Delivery Agency, to be created under the terms of the Olympic Bill announced in the Queen’s speech in May. Ministers now hope the bill will become law in six to nine months, allowing the ODA to be up and running in 15 to 18 months.
Appointments to the ODA board have not yet been announced; however, these are likely to include representatives from the LDA and TfL to ensure continuity with work that is taking place. Some longer term contracts tendered by these organisations will come under the control of the ODA.
The ODA will then tender the remaining construction contracts, including much of the actual building work. Under its auspices, if all goes to plan, the UK construction industry will deliver its most prestigious project to date. Those involved are determined that terrorism will not halt its progress: the Metropolitan police were involved in the co-ordination of the Athens Games in 2004, and this week the LDA praised the Met and the security services as “outstanding”. But the construction industry must also avoid far more mundane perils if it is to succeed: cost overruns and project delays such as those experienced on Wembley stadium will not be welcomed by a government that has invested so much to bring the Games to the UK.
How to stop the Games going over budget
No sooner had London won the bid than British commentators instantly began worrying about everything going wrong. But it doesn’t have to …
Peter Rogers, chairman of the Strategic Forum
There’s every chance of it being successful. We’ve got to break out of this cultural thing where we get a bit of good news and people have to knock it. At the end of the day it will come down to the clarity of the brief, good leadership and clear ownership in terms of who is in control of which elements. We need absolute clarity about who’s heading this up and who’s in charge. That was the problem with the Millennium Dome – the dome itself got built very effectively and quickly to programme but there was no leadership about the contents.
I hope that Lord Coe will end up looking after this, but he needs to have real power. The worry I would have is that there are too many people and too many fingers in the pie – the government, the London Development Agency, local authorities. There’s a real risk of confusion and that’s when you start getting overruns. There’s talk of Prescott getting involved because of all the planning issues, but what’s his role? The minute you end up with a lack of clarity it’s a slippery slope.
The worry I would have is that there are too many people and too many fingers in the pie – the government, the LDA, local authorities
Peter Rogers, Strategic Forum
Murray Rowden, director of cost management in London, Turner & Townsend
On a lot of big schemes the investment partnerships are not sorted out upfront; people pull out or don’t do what they said they’d do at the outset. We need to pull together on this one.
We need to sort out the logistics as well, making sure that sites on different developments are integrated – are they happening at the same time? Are they competing with each other? There are going to be a lot of spin-off projects, a lot of developers maximising their opportunities and one of the biggest challenges to the UK construction industry is getting the capacity and capability across the whole supply chain.
For me, the big thing where the game will be won or lost is the upfront issues – aggregating and engaging the supply chain, creating alliances, getting it investing. We should be picking up lessons learned from other major projects, such as Heathrow Terminal 5 where they invested in steel manufacturing and set up an M&E buying club. Don’t just leave it to the supply chain to resolve, because there’s a lot that can be done now.
Jon Coxeter-Smith, partner in the sports division, Davis Langdon
I think, in the first place, we need to understand that it’s not about managing costs; it’s about managing the things that make costs. Start out with a realistic budget – well researched, related to what’s gone before – a clear understanding of the risks and a plan that involves the right kinds of people doing the right things in the right order at the right time.
It sounds obvious, but often it hasn’t happened in full at the planning phase before people try and get on with the next thing. There’s been a lack of discipline, a lack of rigour, a lack of ability to influence external influences. There’s political stuff to be sorted out as well – what powers the ODA has and what checks and balances are in place. It’s not a matter of setting it up and then pushing it on. You’ve got to watch it every day and have alternatives in mind. After all, plans are only plans.
Who you’ll need to know
As the director of development at the London Development Agency, Gareth Blacker is the LDA representative most closely involved with the construction phase of the Olympics. He will oversee all early work procured through the LDA, and will be responsible for acquiring the land needed for the construction programme.
James Bulley has been on secondment to the London 2012 bid team from consultant Drivers Jonas, where he is a partner. He is director of infrastructure at London 2012, responsible for transport, accommodation and sports facilities. He will continue in this role during the period of transition to the London Organising Committee of the Olympic Games and the ODA.
After leading London’s 2012 bid, Sebastian Coe will now become the chairman of LOCOG. He will primarily oversee the running of the Games themselves, but will liaise with the board of the Olympic Delivery Agency on issues such as transport. Coe’s deputy will be James Mills, chief executive of the London bid team for the past 18 months.
Tessa Jowell, the secretary of state for culture, media and sport, was made Olympics minister immediately after London was announced as the host city. She will be the point of contact in government for all aspects of the Olympic process, and will work with the relevant borough councils to oversee delivery of the Games.
As chief executive of the LDA, Manny Lewis will be closely involved in the earlier stages of the Olympic construction process, as his organisation will control the tendering and development work prior to the creation of the Olympic Delivery Agency. Lewis’ role is set to continue after the transition, as his organisation is likely to be represented on the ODA’s board.
Hugh Sumner, head of Olympic Transport Strategy at Transport for London, led the team that put together the transport aspect of the bid. He will head the £17bn transport improvement programme while TfL waits for the creation of a dedicated transport body within the Olympic Delivery Agency. It is likely that Sumner will be heavily involved with the ODA once it is established.
‘We aren’t going to let these people affect us’
We were completely euphoric about winning and then the news came in. We were with Ken Livingstone and he was being fed the news, and it was horrible.
It was about 4.40pm, I was in the lobby of the hotel, we’d just had a party at the restaurant Indochine and we were on our way to other celebrations before we got the plane back. Everything stopped – we just glued ourselves to the telly. How can you feel euphoric when your friends, your colleagues are trapped in London? We were devastated, we still are. We feel shock and horror and we just want to get back. It was very frightening because we couldn’t call anybody. I’ve got four children and three of them work in London, two work close to Aldgate and my wife works in the City.
But this is London we’re talking about, and we aren’t going to let these people affect us. We will host a wonderful Olympics. It’s about people – that’s what our presentation was about. This will be the greatest Olympics ever.
The view from the finishing line: How to build a winning Olympic stadium
They’re massive, they’re high profile and they absolutely have to be completed on time – building the venues for an international sporting event is no mean feat. But those who’ve been involved in Games gone by say the four-week period of the Olympics and Paralympics is the tip of the iceberg.
“You know what estate agents say about location, location, location – in the case of the Olympics, it’s legacy, legacy, legacy,” says Jay Parish, a director at Arup Sport, who is involved in building the main stadium and the WaterCube for the 2008 Games in Beijing. “That offers quite a challenge. The Olympic stadium is designed and optimised for athletes, but athletics doesn’t have the demand for a huge venue afterwards.”
London’s bid is based on a stadium seating 80,000 at the Games, but 25,000 afterwards – meaning that there will be 55,000 temporary seats. This brings its own challenges. Parish points out: “The fixed tiers don’t move, so they will always be further from the football pitch, say, than they would in an ideal world.”
Parish describes Olympic developments as a cross between architecture and a big civil engineering project, but despite their vast scale, attention to detail is crucial: “In such a huge arena, even a tiny change can cost millions.”
And with the host country’s national pride at stake, you can expect many other eyes to be scrutinising every detail of your work. Rod Sheard, senior principal at HOK Sport, who worked on Stadium Australia for the Sydney Olympics in 2000, definitely noticed the heightened media interest. “There’s no clever way to get around it – things don’t always go right and we found that the easiest way to deal with it was to be open, accessible and honest.”
But there were other more welcome differences. “When you work on a normal project, the views of the design team and the client team are always a little bit adversarial,” says Sheard. “But with Sydney, we found those barriers broke down quite a lot – people felt they’re all in it together. Planning permissions got through much quicker, there’s much more political support. It’s a great experience.”
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