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Olympics chiefs in plea for bail-out
Matthew Beard, Sports News Correspondent21 Jan 2009
THE Olympic Delivery Authority will ask Alistair Darling for a bail-out of several hundred million pounds as it seeks to keep the building of 2012 venues on track.
The agency needs emergency funds after private investment in the 2012 media centre and Olympic village evaporated in the credit crunch.
It will request extra cash from a £1billion contingency fund within the overall £9.3billion Games budget which is controlled by the Funders' Committee chaired by the Chancellor. The £380million media centre faces a shortfall of £160million - the amount that private developers Igloo failed to raise.
As far as the village is concerned, there is still no prospect of developer LendLease raising its £450million share of the £900million cost.
If the release of funds is approved then Olympic chiefs could be faced with the worrying prospect of about half of the contingency fund having been spent with three and a half years still to go until the start of the Games.
The £1billion was set aside for unforeseen risks such as a sudden economic downturn. There is another £1billion pot available for risks specific to individual building projects.
The media centre has been subject to a major design review. The ODA is expected largely to stick to its plan to build it in Hackney Wick with a final plan to be announced next month before building starts in the spring.
The Standard has learned that cost-cutting proposals to relocate part of the Olympic media centre to the Stratford City shopping complex look certain to be abandoned. The ODA last year began talks with Australian developer Westfield to house about 10,000 print journalists - half the total media contingent - in temporary workspace at the shopping centre which will be completed in 2011. But Games chiefs are set to conclude that a move would not make significant cost savings.
Olympics minister Tessa Jowell has led attempts to save the original plan for a "digital hub" in Hackney Wick which it is hoped will create up to 10,000 jobs as a key legacy of the Games.
An ODA spokesman said: "While we have been exploring other options and discussions are continuing with Westfield about office development, the base case has always been for a main press centre facility in Hackney. This process is nearly complete but no final decision has yet been taken."
Reader views (21)
Not more of my money. make Seb Coe pay it out of his own fortune.
- Kerry Trubee, purley, 30/01/2009 15:21
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The aquisition of the games was Blair ego trip like so many of his other headline grabbing initiatives . The cost projection utterly spurious and he and Harman should be bought to book for spouting absolute garbage about the cost.
- Peter French, Orihuela Costa Spain, 26/01/2009 19:25
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i feel sorry for the people in east london.
- Jon, oz, 22/01/2009 13:40
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Give the games to another country. We do not need this excessive cost, for nothing more than a couple of weeks games.
- Mark, Dartford UK, 21/01/2009 23:41
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To Andy London.
Are you really so naive as to think that the contingency fund will be sufficient to cover the increased costs!!. At the current rate of budget/cost overrun this fund will be used up within months. Hundreds of millions in extra finance will still be needed before 2012. This daft project was pushed through without any public consultation,(an independant poll was conducted in London, where the majority of those polled completely rejected the games, on cost alone). The French Olympic Committee must be laughing all the way to La Banque.
- Pat, South of England, 21/01/2009 23:26
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let's just kill this white elephant now - we can't afford it. Given our dire economic situation, no one would blame us. lets just skip this games and go with the 2016 games....
- Zady, London, 21/01/2009 22:55
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any prizes for the most predictable headline of 2009 - more money for the olympics and it still only Jan 2009....like so many before me this has 20 billion written all over it, the budget of around £3 billion during the bidding seems a long long time ago.
- Janet, London, 21/01/2009 21:51
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Money Troughing and Cretins go together like flies and the 'brown odure stuff!'
All very predictable, not rocket science!
- Uncle Vanya, East Anglian Area UK, 21/01/2009 17:07
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This project has always been a bottomless pit.Cut our losses TODAY. Pay the contractual penalty charges and leave the site as a symbol of Tony Blair's hubris. Let commonsense prevail for a change!
- G. Garvey, Darlington, UK, 21/01/2009 14:25
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"Credit crunch forces 2012 agency to ask Chancellor for funds"
That surely must win an award for the most predictable headline of 2009.
Have they spent the twenty five billion pounds I predicted the Olympics would cost yet?
- Lawrence, Costa Del Sol, Spain, 21/01/2009 13:47
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not a penny ever escapes from london to the regions, even if it is supposed to.therefore the regions should never be expected to finance london's latest selfish spending spree of which there have been many.no lottery money or any government money.if you want the olympics-pay for it yourselves as no one else is interested and you will claw every drop of any profit from it.
- Jr, glasgow uk, 21/01/2009 13:43
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Crazy! We can't afford it. How much more money does the taxpayer have to sign over for the Olympics, rescuing banks etc. I can see that we can't cancel much as we would all like.
They should go to the Olympic bods and tell them that we have to cut certain events. Shooting should go, synchronised swimming should go, beach volleyball should go. Maybe with less to build and less events they can keep their budget on track.
Other than that get Steve Redgrave, Seb Coe, David Beckham and everyone else that saddled ordinary people with this monster to come up with the cash.
- Louanne, London, 21/01/2009 13:21
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Londoners, and the country in general, were never consulted about the 1912 Olympics. I agree that those people with big egos, who helped push through these games must put their hands in their pockets. Either that or call the whole thing off and put the rest of the money into meaningful investment such as improved transport and hospitals.
- Mark Wright, Milan, Italy, 21/01/2009 13:20
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Calm down people! As stated it's coming from the already budgeted contingency fund.
- Andy, London, 21/01/2009 12:56
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Cancel the thing now.
- Frederick, London UK, 21/01/2009 12:39
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Let all the celebrities & Cabinet Ministers who helped force through this immensely expensive "bottomless pit" put THEIR "own money" on the line to ensure the success of the 2012 Olympic Games. After all, they promised us all that it would be not only be affordable but that it would be a huge success and a lasting legacy. They must now either put up or shut up!
By the way, in case the Olympic Delivery Authority hadn't noticed . . . Britain PLC is going broke and therefore simply doesn't have several hundred million pounds to throw down the drain! Britain PLC MUST now be prudent or face being the laughing stock in the international financial arena. Errr, what is our Pound "Sterling" worth these days in the international markets?
- Fraser, Telford Park, 21/01/2009 11:50
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How much more money is to go down the drain before we cancel cancel cancel cancel this waste of money Olympics project. We cannot afford it and that is that. The country could go bankrupt and we really must spend money on vital projects. The idea of spending our taxes on sport is terrifyingly stupid. Cancel cancel cancel.
- Jilly, London, 21/01/2009 11:29
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No! This can not be allowed to happen!!!!! We can not give any more of OUR money to this enormous white elephant!
- Ken Joralemon, London, UK, 21/01/2009 10:10
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No, no, no! The Games should be cancelled, not bailed out. We simply cannot afford this ridiculous extravaganza, which will not benefit ordinary people or sport in any way. It has been done before - I believe the citizens of Denver ince decided that it was too much for them. We should do the same.
- Liz, London,UK, 21/01/2009 10:06
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The answer should be NO. We are bankrupt & cannot afford these games. We are pumping too much money into an area of London that will return nothing in return.
- Fly, london, 21/01/2009 09:51
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London's bid for the 2012 olympics was the biggest mistake ever. We could not afford to host the games even before Brown and Darling brought our once great country to bankruptcy. Now, in the midst of the biggest frecession ever, is the time to cancel the games - or "make do" with the facilities we already have. No way should tax payers be asked for more money.
- R.F.York, Yorks, UK, 21/01/2009 09:46
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