ODA coughs up £11m to ensure continued supply from firms on the brink
The Olympic Delivery Authority has pumped money into failing subcontractors in order to ensure continued supply of parts for the Olympic village, it admitted yesterday.
The body admitted yesterday that costs on the Village had risen by £11m to £709m.
New ODA chief executive Dennis Hone said this was largely due to the cost of paying for continued supply from four companies that had either gone into administration or were close to collapse.
The ODA has confirmed that two companies, cladding firm Trent Concrete, and bathroom pod manufacturer EJ Badekabiner, have collapsed in the last three months on the Olympic project, with the ODA paying extra to the firms administrators in order to keep production going.
EJ Badekabiner was subsequently been rescued out of administration by Galliford Try subsidiary Continental Shelf 515.
However, Hone said that two further companies were also being propped up by the ODA, and declined to give names as administrators have not yet been called in.
He said: “We’ve had a number of difficulties on the Olympic Village where we’ve had four contractor insolvencies essentially, and we’ve had to deal with the administrators to keep production going.
“We have to pay the cost of keeping the factory open.”
The ODA confirmed that Trent had been supplying concrete panels for two of the 11 residential blocks on the site, with EJ Badekabiner supplying pods for 3 of the blocks.
The news came in a quarterly update on Olympic finances by the government.
It shows that the ODA will be hit with a £47m VAT bill with the rate moving to 20% in January, and also that security costs for the whole games have risen to £757m.
In addition Hone said the bulk of a £31m increase in utilities costs was a provision against contractual claims brought by a number of utilities suppliers.
Hone said the ODA had been unable to allow the utilities access to the site on promised dates because of the tight schedule and complexity of construction, leading to a number of claims.
Hone said “around two-thirds” of the £31m increase was due to contractual claims, with the balance being down to kit having been installed and then subsequently damaged by the ongoing construction.
Overall the Olympics remains within the £9.3bn budget, but the last quarter has seen the total ODA programme increase by £180m, largely because of a decision to make it pay an extra £162m for facilities management of the park’s operations after construction completion.