Olympics hit another hurdle as costs soar at centrepiece stadium

Mark Leftly@MLeftly
Saturday 22 October 2011 21:57

Fears are growing that the price tag for the 2012 Olympic stadium in east London has risen nearly 10 per cent to £540m, in yet another financial blow for the troubled games.

An Olympic Delivery Authority (ODA) spokesman insisted that the budget remained £496m. However, a source close to the project argued that this price could not be met.

The source added: "This is about design development, ensuring that all sustainability and design commitments are met. This is state of the art and highly sustainable and that costs tens of millions."

Sir Robert McAlpine, which built Arsenal Football Club's acclaimed Emirates Stadium, signed an agreement with the ODA last month to construct the Olympic centrepiece. The group is on heavy incentives to meet the budget, but every project tender is "open book", meaning that sub-contractors could come in with higher-than-expected costs.

The London Olympics have suffered many financial blows, the most serious being the near quadrupling of the overall bud-get from £2.375bn to £9.3bn. The athletes' village is in difficulties as developer Lend Lease struggles to raise funds in the credit markets, and the company is also arguing with ODA over infrastructure costs.

However, sources said that the ODA and CLM, the private sector Olympic delivery partner, have been "juggling" costs at the main park where the key venues will be located. One source said: "We have saved a couple of hundred million in procurement, for example ordering steel early before prices go up."

This means that the ODA, headed by David Higgins, has not yet dipped into its £2bn contingency funds.

The ODA spokesman said: "There is endless speculation about Olympic costs. The sta-dium budget has been published and remains at £496m. We are making great progress on site, starting construction three months early [at the end of this month], and are confident the overall budget and contingency is realistic. We will provide an update on the budget in the summer."

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