Falling land prices cost 2012 organisers £150m 10/02/2010 |
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The collapse in land prices in London as a result of the economic downturn has cost 2012 Olympic organisers £150m, it has emerged.
The Government Olympic Executive’s annual review stated that the overall cost of the Games would still come in under the £9.3bn budget, but revealed that projected receipts from the sale of land near the Olympic Park have been reduced from £250m to just £100m because of the recession, reports the Daily Telegraph.
The paper says that the loss, partially offset by tax savings of £45m, follows the collapse of plans for private investors to share the cost of building the Olympic Village and the media and broadcast centre.
The review also confirmed that the Government will have to find between £110m and £160m in additional costs to maintain new Olympic venues between completion next year and the start of the Games in 2012.
The Government has authorised the release of £13m of contingency funds while the Olympic Delivery Authority (ODA) assesses the costs. More may be required to fill the gap, but the ODA is hopeful that savings elsewhere in the project will reduce the need for the contingency money.
Olympics minister Tessa Jowell said: “As we enter the busiest and most exciting phase of the Olympic project so far, this report shows we are still on time and still on budget. This year, we have seen a part of East London transformed thanks to the immense progress made by the Olympic Delivery Authority and contractors.
“Because of this progress we are making savings – £390m in the last financial year – and where we have had challenges to meet we are, therefore, well placed to respond to them.”
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