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SBD Global/November 28, 2013/OlympicsPrint All
There "is a myth" that the 2012 London Olympics "were delivered within budget," according to John Kay of the FINANCIAL TIMES. The principal relevant facts "are these." The first detailed specification of what was needed for London to host the games "was drawn up" in '02 by engineering and planning consultancy Arup. The report put the cost at £1.8B, much of it "to be privately financed." The budget had by '07 increased to about £6.5B. At Treasury insistence, a contingency allowance, mostly unspecific, of £2.8B -- more than the total original projected cost -- was added. The costs of land acquisition and of the Olympic Village "were mostly excluded in the belief that they would be recovered from property sales after the event." The basis of the claim that the Games came in “within budget” seems to be that a small part -- currently £300M-£400M -- of that £2.8B contingency "remains unspent." That was achieved, however, by "excluding a number of additional unbudgeted expenditures from the calculation, as the National Audit Office has highlighted." There is "likely to be little, if any, net recovery of the further costs of land and housing, which were due to be recouped from property sales." The costs were "grossly and persistently underestimated, and the financial contributions anticipated from private sources overestimated by very large amounts." Every year, to the present day, the expected cost "rose and the likely revenues diminished." The cost of the games to public funds "has proved to be about 10 times the original estimate" (FT, 11/26).
Fifteen months after the last competitor left Stratford at the close of the 2012 London Games, the first residents have "this week begun to move into the former athletes' village, now renovated, replanted and rebranded as 'London's newest neighbourhood,' East Village." More than 2,800 properties, from one-bed flats to five-bedroom townhouses, are "ready for occupation not by sporting superstars but by ordinary Londoners." It is "the first phase of a development that will eventually see 14,000 new homes built on a site the size of St James's Park" (London GUARDIAN, 11/26). ... China "plans to hire 11 foreign athletic coaches" for the 2016 Rio Olympics (XINHUA, 11/27).