November London 2012 Olympic and Paralympic budget report published - Anticipated final cost down £29m
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
The London 2012 Olympic and Paralympic Games remains on time and within budget.
As part of the Government’s Spending Review settlement the final cost of the ODA programme has been reduced by £20m. This has been achieved through the removal of the Stadium ‘wrap’ and efficiency savings. The overall public sector funding package for the Games remains at £9.298bn.
Figures from the London 2012 Olympic and Paralympic Games Quarterly Economic Report show a decrease of £29m in the Anticipated Final Cost (AFC) of the part of the Games being delivered by the ODA - from £7.261bn in June to £7.232bn in September 2010. This includes the savings of £20m identified as part of the Spending Review settlement.
The ODA has also announced today that the roof of the 7000 seat Handball arena is complete with work underway on the copper cladding.
Minister for Sport and the Olympics, Hugh Robertson said: “The ODA has continued to drive down costs and deliver savings despite this being the most complex year in construction terms. The saving of £20m identified in the Spending Review has been achieved with little material impact to the programme.”
Olympic Delivery Authority Chief Executive, David Higgins, said: “This report shows that we continue to be on time and within the budget set by the Government. We have made savings as part of the Spending Review process without jeopardising successful delivery and in total have now saved over £750m since the start of the project to keep us on track. Today we are announcing that the roof of the Handball Arena is complete and across the rest of the Olympic Park progress is very visible with the Velodrome set to be the first new venue on site to be finished early in 2011. With 75% of the programme to Games-time now finished we are in the home straight but are not complacent and are focused on maintaining progress in the months ahead.”
In total around £750m in savings have been achieved by the ODA since the November 2007 baseline budget was agreed. The majority of these savings have been used to control the budget by offsetting cost increases in other areas of the programme and helping to fund the impacts of the credit crunch, thereby reducing calls on the contingency.
The changes in the Anticipated Final Cost (AFC) are as a result of:
a reduction in forecast costs of £20m on the Main Stadium including anticipated savings of £7m from not proceeding with the ‘wrap’;
forecast reduction of £33m in transport capital projects and a increase of £24m in transport operating expenditure;
potential cost increase of £11m on the Aquatics Centre to ensure the project remains on time and to standard;
potential cost increase of £8m on Stratford City Land and Infrastructure for payments due to the London Development Agency as part of the Compulsory Purchase Order process and some additional infrastructure works, including a new pedestrian bridge; and
forecast cost increase in Performance Management to CLM of £10m due to the strong progress of the project against agreed milestones and savings achieved.
Contingency funding totalling £39m was released during the last quarter to enable the ODA to enter into contractual commitments for early security works as part of the Park Operations proposals, generating efficiencies in procurement. It also covered additional security facilities around the Park, the areas between the site and the Westfield Shopping Centre, and for security of IT systems.
The gross allocation of contingency on the programme as of 30 September was £829m. There is £1,143m of contingency available - more than the value of assessed risks. Contingency funds will be required to fund the Park Operations work following the finalisation of the business case.
From April 2011, as a result of the Spending Review settlement, around £0.5bn of the funding package will be held as contingency for cross-programme issues. This reflects the programme’s changing focus from construction to operational requirements. This is in addition to the Programme Contingency that forms part of the ODA’s budget.
Hugh Robertson, added: “The ODA’s management of the construction programme has allowed us to open-up the funding package and contingency for cross-programme issues as we enter the operational phase.”
Preparation of the venues and infrastructure in the Olympic Park for the Games is almost 75 per cent complete. The ODA has hit all of its build milestones to date including the Velodrome and Aquatics Centre structures and roof. All venues are on track to meet scheduled handover dates to LOCOG.
Notes to Editors
A copy of the London 2012 Olympic and Paralympic Games Quarterly Economic Report November 2010 is available on the DCMS website.
This report covers the period 1 July 2010 - 30 September 2010.
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. On 24 May 2010 the Government announced that the ODA will make £27m of in-year savings from the current financial year taking the public sector funding package to £9.298bn.
As reported since the February 2010 Annual Report, it has been agreed that the ODA will take on additional responsibilities for the operation of the Olympic Park and its venues and facilities between 2011 and the handover to legacy owners by 2014. This includes Facilities Management, logistics and access arrangements and security. The ODA has estimated that the additional cost of this work would be up to £160m depending on the finalisation of scope, delivery approach, procurement and other factors. A business case has now been prepared and is expected to be approved next month.
The 7,000-seat Handball Arena is on track for completion next spring. New images show the unique roof - fitted with 88 ‘sun-pipes’ that use daylight to naturally illuminate the field of play - as complete, and the glass concourse level edging towards the finishing line. Work is also underway in cladding the top section of the venue with 3,000sq m of copper with a high recycled content. The arena, which has retractable seating in the lower tier for flexibility during Legacy mode, will host men’s and women’s preliminary stages and the women’s quarter finals for the Handball competition, the Fencing Discipline of the Modern Pentathlon, and will also be the stage for Goalball during the Paralympic Games. The latest images of the London 2012 Handball Arena can be downloaded from the GettyImages website.
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