Annual report reveals 20% chance that Olympic Games will not be delivered within £7bn budget
The Olympic Delivery Authority (ODA) has said there is a 20% chance it will use more than its original contingency budget to build the 2012 Games.
In its annual report and accounts, published today, the ODA states that there is only an 80% chance the programme can be delivered within its £7.095bn budget. This includes the £6.09bn project budget and the programme contingency of £968m agreed with the government.
However, it does not include an additional contingency of £1004m which is held by government to cover “unforeseen risk” to the overall delivery of the Games – which would bring the total cost to £8.009bn if it was used in its entirety.
Meanwhile, the ODA’s chief executive David Higgins will receive more than £500,000 for his work on the programme over the past year.
The figure includes a £205,000 bonus on top of a £373,000 a year salary. Howard Shiplee, the programme’s construction director, received £326,000, including a £52,000 bonus.
The accounts show that the ODA has so far spent £858m on preparation for the 2012 Games, having drawn down £740m of its funding. The ODA said that work done to date is below that originally anticipated by £108m, due to a combination of programme changes and cost savings on initial site works.
CLM, the delivery consortium which includes Mace, Laing O’Rourke and CH2M Hill, received £87.6m over the year.
David Higgins said: “There will always be financial challenges on a multi-billion pound programme of this complexity and we are directly impacted by the credit crunch and the deteriorating property market. We will continue to exert the tightest possible financial control while striving for maximum value from the investment in the project."