BusinessCompany NewsOlympic bid risks huge overruns

Olympic bid risks huge overruns

A 2012 London Olympics could have to secure huge private sector backing with the prospect of a 100% cost overrun and escalating insurance premiums.

Link: Top FDs not rushing to join Olympic bid

The company leading the UK bid, chaired by Barbara Cassani, is continuing its search for a winning FD to secure victory for the UK bid team.

The bid company, to be called London 2012, is offering £75,000 for the FD job. The term will run until at least July 2005 when the International Olympic Committee decides which country will host the 2012 Olympics.

Bill Enevoldson, partner at KPMG and FD of the Manchester 2000 Olympic bid, said: ‘Without private sector involvement, you could be seriously exposed to overruns. Bidding and putting it on is something else. There still needs to be a lot of work done around the budget, including work on infrastructure.’

The government is planning the redevelopment of London’s Lea Valley to make way for the various Olympic villages that will be necessary to stage the games, a task that is expected to involve the creation of 30,000 new homes.

While the government has assumed contingency funding of £1.2bn to cover cost overruns, leading accountants said that a 100% overrun was plausible.

This would bring the cost of staging the games to £7.2bn, compared with the current official forecast of £3.6bn.

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