By Lea Pachta
The London 2012 Olympic and Paralympic Games remain on time and within budget, data published by the Government and Olympic Delivery Authority (ODA) confirms.
Figures from the London 2012 Olympic and Paralympic Games Annual Report show a rise of £21m in the Anticipated Final Cost (AFC) of the programme being delivered by the ODA — £7.262bn from £7.241bn since the last report, equivalent to an increase of 0.3 per cent and within the £8.1bn overall ODA budget.
The report also details the significant progress made in getting ready for the Games. The Big Build is now over halfway through with key achievements this year including the completion of the Velodrome steel structure, the Aquatics Centre roof, the first three Olympic Village blocks and the main structure of the Olympic Stadium.
Changes in the AFC inevitably occur as a project of this scale progress, changes are the result of increases but also savings made elsewhere. Increases are the result of a reduction in the expected returns from future Stratford City land receipts that are now forecast to be lower due to the deterioration of the property market, additional funding required for Park management where the ODA have been asked to take on a range of additional work and increased security costs related to the development of the Olympic Village.
The savings that have been made are in, for example, infrastructure and the cost of the International Broadcast Centre and Main Press Centre, and in a reduction in forecast risks — in total these make savings of over £100m.
The majority, £1.25bn, of contingency remains unreleased and the ODA continues to make good progress in preparing the venues and infrastructure in the Olympic Park, with construction on all major venues well underway.
The Government has agreed a Memorandum of Understanding (MoU) with the Olympic Lottery Distributor (OLD). Under this MoU the Government will ensure that the OLD will receive a proportionate share, as laid down in the Grant Memorandum between OLD and ODA, of any income received in relation to the Olympic Village or other assets that were partly funded by lottery money.
Olympics Minister Tessa Jowell welcomed the continuing progress:
“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.
“We have maintained our focus on helping Britain come through the recession and as the economy recovers we will not become complacent. We will continue to ensure that the investment in the Olympics is an investment that brings benefits to the whole of the UK now, and for many years through business, skills, sport and culture.”
Olympic Delivery Authority Chairman John Armitt said:
“We are continuing to make strong progress across the project. There are however still big challenges ahead as construction accelerates across the site and the workforce peaks. This will be our toughest year. We take nothing for granted but I am confident that the foundations for success are now in place.”