Monday, 20 July 2009

Nearly three years to go and London 2012 remains on time and on budget

The London 2012 Olympic and Paralympic Games remain on time and on budget, new data published by the Government and Olympic Delivery Authority today shows.

Figures released in the London 2012 Olympic and Paralympic Games Quarterly Economic Report July 2009 show that the Anticipated Final Cost (AFC) of the Olympic Delivery Authority (ODA) programme hasn’t changed over the last quarter.

The majority (65 per cent) of contingency remains unreleased and the ODA continues to make good progress in preparing the venues and infrastructure in the Olympic Park, with construction starting today on the Handball Arena two months early.

Olympics Minister Tessa Jowell said:

“On the eve of our three years to go celebrations the Olympic project remains on time and on budget. The overall funding package for the games remains the same and the anticipated final cost of the ODA budget is the same at it was at the end of March 2009 - £7.234 billion.

“The ODA continues to make good progress on the Olympic Park and construction is now underway on all of the permanent venues. There are now over 4,000 workers on site and the project continues to provide jobs and millions of pounds worth of business opportunities to companies around the UK in a challenging time.”

Olympic Delivery Authority Chairman John Armitt said:

“We are on track and remain within budget. With work starting today on the Handball Arena, construction is now underway on all permanent venues. The ODA has hit all of its milestones for the last year and we will shortly set out the next set which will take us to July 2010. Though we are making strong progress we are not complacent. The year ahead is a challenging one as activity on site reaches its peak.”

Since the last quarter a release of £19m has been made from the funder’s contingency to allow modifications to the Olympic Park venues to make them more secure and resilient to attacks.
The Anticipated Final Cost has not increased because actual and forecast cost increases are expected to be offset by savings and because good progress on the Olympic Park means risks to the programme reduce.

The public sector funding package for the Games announced in March 2007 was £9.325 billion. Of this £6.1 billion was identified as the Olympic Delivery Authority budget, with around £2 billion contingency and £1.2 billion for non-ODA activities such as wider security and support for elite and community sport.

The majority of contingency used to date has been to mitigate the impact of the credit crunch. Contingency of £1.272 billion remains from the £1.972 billion available.

Key points from the Government Olympic Executive’s second quarterly report are:

  • The AFC for the ODA programme remains at £7.234 billion – the same as it was at the end of March 2009;
  • The majority of contingency used to date has been for projects affected by the economic downturn;
  • The gross allocation of contingency to date on the project is £700 million. The net allocation is £376 million, assuming the additional funding made available in May to the Olympic Village is repaid from the future sale of Olympic Village homes.
  • There is more contingency available than assessed risks
  • £1.272 billion, over 65 per cent, remains unallocated in contingency funding;
  • Forecast risks on the project going forward continue to reduce due to efficient delivery. The ODA’s latest estimate is that they require £685 million of this remaining contingency (a drop from £703 million in March 2009);
  • There are over 4,000 people currently working for contractors on the Olympic Park;
  • To date £3.5 billion worth of contracts have been directly awarded by the ODA, 98 per cent of these to UK based companies.
  • The ODA continues to make good progress in preparing the Olympic Park. Construction work is well underway with the roof structure of the Aquatics Centre now over 50 per cent complete; the roof support of the Stadium now fully complete and all 10 milestones that the ODA set out to achieve a year ago have been reached;
  • The programme remains on track to finish on time and within budget.

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