Olympic Delivery Authority chief executive David Higgins could set up a private investment fund to plug a rumoured £2bn shortfall for the 2012 Olympics and associated regeneration work
As the ODA prepares to publish its shortlist for the delivery partner, Higgins is understood to be looking at whether to ask institutional investors to put money into a fund to help pay for infrastructure needed for the legacy phases of 2012.
The idea would extend the "roof tax" being tried in Milton Keynes. According to this developers could pay up to £50,000 a house for vital infrastructure. However, in the ODA model, the tax could be used to pay back investors to the fund, because even if a roof tax were used, it would not produce cash to pay up front for infrastructure.
The ODA is looking at ways to get around what is rumoured to be a shortfall in funding for the Games. The government has committed £3.4bn to pay for the main facilities, but the Treasury is unlikely to cover the cost of turning the lower Lea Valley into a 35,000-home community. Only £1bn is earmarked for infrastructure for this and £3bn is thought to be required.
Higgins has been in contact with CMK Board, formed by Milton Keynes council and English Partnerships in 2002 to deliver the town's development framework.
John Walker, chairman of CMK Board, said he had had several "informal chats" with Higgins about using private sector funds.
He said: "I understand he's interested in it. The way I see it, it's all about cash flow, getting private money to fund a gap before you get the contributions from utility companies and developers. The ODA would need to make sure that funds are procured in a way to get the best value for the public sector."
An ODA spokesperson said: "There are no plans at the moment for a fund, but it's a matter of public record that the private sector will be involved, for example at Stratford City."
Four consortiums are expected to make the shortlist for the delivery partner job, to be:
- Balfour Beatty, Amec, Jacobs, Mace, Laing O'Rourke and CH2M Hill
- Bovis Lend Lease and Capita Symonds.