Friday, November 24, 2006

Olympics- £20bn Might Not Do It

I never even wanted the Olympics in the first place

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.


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