Stadium now costs £525m but overall budget has risen by only £16m
The Mayor of London’s Olympics watchdog has announced that the cost of the Olympic venues have risen by more than £100m since November.
Cost pressures have caused budgets to rise by £106m in the last eight months, according to Carphone Warehouse founder David Ross. He cites the example of the Olympic Stadium, whose budget has risen by £29m, from £496m to £525m.
But Ross adds that savings achieved and forecast elsewhere on the Olympic programme means that the overall budget has risen by only £16m.
Ross was commissioned by Boris Johnson last month to review London’s preparations for the Games. He interviewed senior personnel within the ODA, LOCOG, LDA and the Government Olympic Executive.
The report reveals the LDA’s concerns that the ring-fenced transformation budget of £350m will be too little to deliver legacy facilities for after the Games. It has appointed Capita Symonds to review the issue.
The Olympic Village, which is currently the subject of funding negotiations between the ODA and developer Lend Lease, also comes under scrutiny by Ross’ team. Lend Lease, it says, is having difficulty in securing private finance and in determining how much it will need to make the project viable.
The report said: “Significant additional public sector funding is likely to be required to deliver the project”. At the moment, the Village’s £800m budget is broken down to £550m payable by the ODA, with a £250m payable by Lend Lease. Ross said Lend Lease’s ability to recover that £250m is at “major risk”.
Ross is critical of the project’s security preparations, saying that it is “significantly behind” the rest of the scheme.
It said: “There will be significant cost implications if security considerations have to be built in to the Olympic facilities/logistics at a late stage.”