Elyo Suez, the French utilities company, will sign a deal with the Olympic Delivery Authority (ODA) in the next few weeks to provide power for the London 2012 Olympic Park.
Elyo will invest £40m into building an energy centre, in exchange for ownership of the asset after the 2012 games. The deal will also include a centre with a similar level of investment in the nearby £4bn Stratford City retail project, which Elyo will sign with developer Westfield.
The ODA, Westfield and Elyo have been in negotiations since the French group was made preferred bidder last October. A source said that the ODA "expects to announce a deal within the coming weeks".
The first centre will provide power, heating and cooling systems for the Olympic Park, where venues such as the stadium and aquatics centre will be located. The energy itself will be provided by EDF, another French giant that is one of the main sponsors of the 2012 games.
The centres have been procured jointly to enable the ODA and Westfield to save money on costs. Although London 2012's cost overruns, such as the near quadrupling of the overall bud-get to £9.3bn, are well docu-mented, savings have been made on procurement and buying building materials early so as to avoid inflation.
Architect John McAslan + Partners is designing the energy centres. The construction of the Olympic Park centre should start later this year. A large building at 20 metres in height, 70m long and 30m wide, it will be able to accommodate the vast energy infra- structure needed for the games.
It is also expected that the ODA's chief executive, David Higgins, will soon announce an interim agreement with developer Lend Lease over the £800m Olympic Village. This will allow construction of the village to start this week, while the parties continue to thrash out a financial agreement that has been delayed due to the credit crunch.
Lend Lease has struggled to raise the debt finance to build 3,300 flats on the site. It is also understood that the company has asked the ODA to underwrite the profit the developer expects to make from the sale of the flats after 2012.
There has also been a dispute over the infrastructure costs for the village. Lend Lease wants the Government to more than double its commitment to building the necessary transport links, from £200m to £500m.Reuse content