Friday, November 24, 2006
Olympics- £20bn Might Not Do It
As regular readers will know, our estimate for the all-in cost of the 2012 Olympics has always been £20bn. A "firm and robust" figure, to coin a phrase.
But if a new survey of civil engineers is right, we may need to increase it. The Gruaniad reports:
"According to this week's New Civil Engineer magazine, 500 industry professionals now see the final cost of the 2012 games at coming in 39% over even the worst-case-scenario costs envisaged by the government consortium.
The price originally put forward in the London bid was £2.375bn. This week Ms Jowell admitted that it had risen £900m to £3.3bn, with more increases "inevitable". Although a final budget has yet to be presented to parliament, a worst-case budget scenario of £6.2bn has been mooted.
On top of that will be the so-called "contingency fund", which London mayor Ken Livingstone is wanting capped at 20%. Today's survey of 500 civil engineers recommends a 39% contingency fund, pushing the final cost up to a potential £8.6bn.
Those prices are pre-VAT, pushing the potential final bill up to £11.6bn."
Yes, I know what you're thinking- how can 17.5% VAT take £8.6bn up to £11.6bn? But this is the Grauniad, so let's scale it back to the correct figure of £10.1bn. Even so, add in the other £11.4bn of "incidentals" (see previous blog) and you're looking straight down the barrel of £21.5bn.
And six years still to go.
Posted by Mike D at 9:54 pm