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London 2012 – still on time, still on budget

News Release issued by the COI News Distribution Service on 23 November 2009

The London 2012 Olympic and Paralympic Games remain on time and within budget, new official data published today by the Government and Olympic Delivery Authority (ODA) confirms.

Figures from the London 2012 Olympic and Paralympic Games Quarterly Economic Report show a small rise in the Anticipated Final Cost (AFC) of the construction programme being delivered by the ODA – up by £7m to £7.241bn during the last quarter, equivalent to an increase of less than 0.1 per cent.

But no contingency has had to be released to cover these potential increases as it is anticipated that they will be covered, either wholly or in part, by savings made in other parts of the building programme.

The majority (£1.27bn) of contingency remains unreleased and the ODA continues to make good progress in preparing the venues and infrastructure in the Olympic Park, with construction on all major venues underway.

More than 1,000 businesses across the UK have won direct contracts from the ODA; part of £5bn worth of contracts, creating thousands of business opportunities throughout the supply chain.

Olympics Minister Tessa Jowell welcomed the continuing progress:

“This reports shows we are still on time and still on budget. Every day the Olympic Park changes a little bit more, confirming the huge progress that the Olympic Delivery Authority and its contractors are making in building the venues and infrastructure that will be so familiar in less than three years time.

“At each and every stage the building programme is good news for London, and good for Britain – helping the UK come through the recession now, showcasing our construction and design skills and leaving behind a long-term legacy of new facilities and a new urban park in a transformed east London.“

Olympic Delivery Authority Chairman John Armitt said:

“We are on track and within budget. Cost pressures across the programme continue to be offset in the main by savings and the majority of contingency remains unreleased.

“The external structure of the Stadium is complete as is the roof of the Aquatics Centre and work is progressing quickly on the other venues, transport and infrastructure projects needed for Games and in legacy. 75p of every pound we spend is for long term improvements to this part of east London so there is already a strong physical legacy from the project.

“Over 7,000 people are working on the Olympic Park and Athletes Village and businesses all over the UK are benefitting from the economic opportunity the preparations for the Games present.

“There is no cause for complacency. Next year is set to be our toughest yet as activity on site reaches a peak and it is essential we maintain our momentum.”

The changes in the Anticipated Final Cost (AFC) are as a result of:

Savings made on site preparation and potential savings opportunities on transport projects; the potential requirement for more to be spent on upgrading local sporting facilities for Games-time training venues and an increase in the cost pressure on other Parkwide projects; increased costs for vehicle screening, accreditation areas and transport malls, although this is being offset by savings achieved elsewhere such as logistics;and potential cost pressures on the Olympic Village and Stratford City land and infrastructure projects. This relates to a reappraisal of the security arrangements for the Village site during the construction period.

Other key points from the Government Olympic Executive’s fourth quarterly report are:

In the last quarter £2m of programme contingency was released for: additional seating for people with impaired mobility at the Aquatics Centre; to allow the option to purchase rather than lease the training pools at Eton Manor so that they can be reused in legacy; and to investigate the suitability of Barking and Dagenham as a venue location for shooting, rhythmic gymnastics and badminton; The majority of contingency used to date has been for projects affected by the economic downturn; The gross allocation of contingency to date on the project is £702m; The net allocation is £378m, assuming the additional funding made available in May for the Olympic Village is repaid from the future sale of Olympic Village homes; There is more contingency available than assessed risks; Forecast risks on the project continue to reduce due to efficient delivery. The ODA’s latest estimate is that they require £683m of the remaining contingency, a drop from £685m in July 2009; There are over 7,000 people currently working for contractors on the Olympic Park and Village; The ODA continues to make good progress in preparing the Olympic Park. Construction work is well underway with the roof structure of the Aquatics Centre now complete; the external structure of the Stadium also complete and all 10 milestones that the ODA set out to achieve a year ago have been reached.

Notes to editors

1. A copy of the London 2012 Olympic and Paralympic Games Quarterly Economic Report November 2009 is available on the DCMS Website at: http://www.culture.gov.uk/reference_library/publications/6454.aspx

2. The public sector funding package for the Games announced in March 2007 was £9.325 billion. Of this £6.1 billion was identified as the Olympic Delivery Authority budget, with around £2 billion contingency and £1.2 billion for non-ODA activities such as wider security and support for elite and community sport.

3. Decisions to release contingency funding are made by the Ministerial Funders’ Group. This is Chaired by the Chancellor of the Exchequer (Alistair Darling), and also consists of the Chief Secretary to the Treasury (Liam Byrne), Minister for the Olympics (Tessa Jowell), Secretary of State for Culture, Media and Sport (Ben Bradshaw), Secretary of State for Communities and Local Government (John Denham) and Secretary of State for Transport (Lord Adonis). The Mayor of London attends but is not a member.

Contacts:

DCMS Press Enquiries and Out of hours telephone pager
Phone: 020 7211 6263
Mobile: 07699 751153
NDS.DCMS@coi.gsi.gov.uk

Julia Smith.
Phone: 020 72116215
julia.smith@culture.gsi.gov.uk