Monday, January 30, 2006

Vale Of Tears


Let me say straight away I have absolutely no interest in sport. The only sporting events I ever watch are the games where England get knocked out of the World Cup on penalties. They leave me feeling so depressed and angry that I have to go out and smash up a few town centres to calm down.

Which was pretty much how I felt last July when, just because some Greek bloke pressed the wrong button, we got landed with the 2012 Olympics. Not only am I angry about being forced to fund yet another parade of gallant British losers, but I know as night follows day that the whole fiasco will run way over its official £2.375bn budget.

There's a good summary of the facts in a Commons Library Research Paper. The headline £2.375bn of public money is actually only the start. That pays only for the construction of venues and the Olympic Park infrastructure.

We are going to spend a further £9.9bn (yes, £9.9 Billion) on associated infrastructure. This includes £2.7bn on sports venues, further Park infrastructure, and the Olympic Village. The remaining £7.2bn is going on London's transport infrastructure that the government argues it would be spending anyway.

And then there's the cost of actually running the Games. That's put at £1.5bn, which the organisers reckon will all be met by revenue from the games.

So totting up, the projected cost comes to a grand total of £13.8bn, of which £12.3bn comprises infrastructure projects. And all to be done in roughly the same location in a space of 6 years.

Not only does it make to Dome and Terminal 5 pale into insignificance, the Pyramids themselves become Lego models.

Is there even the faintest chance this lot will come in on budget?

Er...no.

Sydney ran two-times over budget, and Athens four times. We're a lot better? With the Dome, the Tunnel, Pickett's Lock , and now Wembley? Don't make me laugh. (Yes, I know the Wembley contract put most of the over-run cost on the main contractors, but nobody will take the Olympics on those terms).

All around the world public infrastructure projects routinely run way over budget. Boston's notorious "Big Dig" tunneled highway project was originally budgeted at $2.6bn, and ballooned to $15bn. The Cato Institute reported research showing that, internationally, 90% of public infrastructure projects exceed budget.

The organisers of the London Olympics are already worried. So much so they've decided to call in the heavies to put the frighteners on the contractors. According to the Times, 'organisers of the 2012 Olympics are preparing to use undercover surveillance to prevent construction firms from cheating to win £3 billion of contracts to stage the London event...new MI5-style techniques, including paid secret agents, to stop building work from being hijacked by cartels'.

That will presumably include listening devices hidden in bricks and bags of cement. Although sadly, they haven't managed to recruit many actual spies. A "Mr Williams" said:

“The take-up of what is effectively our informant programme has not been as good as I would wish. I would want people in the construction industry and elsewhere to understand that we have this programme and our officers have been trained by the best to run informants. We play a professional game. It’s possible somebody will remain within an organisation, which is involved in wrong- doing, as an informant.”

Hmm. IIRC, previous generations of construction industry informants ended their days holding up the elevated section of the M4.

But I digress. In the words of Cato's report:

'The study concluded that lying, or intentional deception, by public officials was the source of the problem: “Project promoters routinely ignore, hide, or otherwise leave out important project costs and risks in order to make total costs appear low.” Politicians use “salami tactics” whereby costs are only revealed to taxpayers one slice at a time in the hope that the project is too far along when true costs are revealed to turn back.'

Prepare for a great deal of wailing and gnashing.

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