Financial Crisis Dampens London’s Olympic Plans

Organizers of the 2012 Summer Games are looking for ways to scrimp amid the worldwide credit crunch, tumbling domestic property values and rising unemployment.

The Summer Games in Beijing wrapped up two months ago, but Britain is still drunk on the heady wine of victory. Thousands of people lined the streets here this week for a boisterous parade honoring the nation’s Olympians, whose surprising haul of gold medals provided extra reason — if one were needed in this pub-strewn country — to party.

London is set to host the Olympics in 2012, but the global financial crisis has left organizers looking for ways to scrimp amid a worldwide credit crunch, tumbling domestic property values and rising unemployment.

Already, the size of the athletes’ village has had to be pared down. Plans to erect temporary sporting venues might be scrapped. And the government could be forced to hollow out its contingency fund of $3.9 billion, out of a total Olympic budget of $16.5 billion, if some of the private financing fails to come through.

Credit Crunch Forces London Olympic Bosses to Recalculate

London’s Olympic chiefs are having to rework their budgets as the global credit crunch squeezes private funding for the 2012 Games — although Team GB’s success in Beijing has helped boost the coffers.

The government expects about seven billion pounds of private sector money to go into the Olympics and the regeneration of the area around Stratford in east London.

But fears are growing that, as banks worldwide stop lending, developers are struggling to come up with the cash, and taxpayers will have to step in.

The one-billion-pound Olympic Village, which will provide accommodation for 17,000 athletes, is proving the biggest headache as Australia’s Lend Lease, the preferred developer for the project, reportedly struggles to find the money.

A government study published in July warned the deal with Lend Lease — which had hoped to recoup some of its investment by selling on some of the accommodation after the Games — was “significantly affected by the downturn in the financial and property markets since the turn of the year”.

London Olympics May Scrap Venues Amid Credit Woes

London’s 2012 Olympics organizers may scrap plans to build temporary arenas for sports such as basketball and shooting to save money as the global financial crisis squeezes the 9.3 billion-pound ($16.3 billion) project.

“The credit crunch is hitting the Olympics hard, but we remain resilient,” said John Armitt, chairman of the London Delivery Authority, at a meeting of the city’s legislative assembly today.

Organizers have eliminated the need for four temporary venues by moving events to existing arenas such as the ExCeL London conference center. The authority is awaiting a review by consultants KPMG into whether to reassign basketball, equestrian and shooting events, said David Higgins, chief executive of the authority, which is in charge of building the Olympic Park.

The Olympics site is Europe’s largest public construction project, and plans include regenerating a rundown section of east London where the games will be staged. Developers involved in the project have been unable to get bank loans for the Olympic Village, where athletes will stay, and for the broadcast center.

Armitt suggested that the Olympic Village developer, Australia’s Lend Lease Corp., may not be able to arrange private financing for the 1 billion-pound project by the end of December, as planned.

“You should not hold yourself to getting a deal by Dec. 31 if you can get a better deal by Jan. 31,” he told reporters, adding that the funding talks are very “fluid.” Calls to Lend Lease in London and Sydney weren’t immediately returned. The company remains committed to the project, Armitt said.

‘Cozier’ Than Beijing

Mayor Boris Johnson told a parliamentary committee yesterday that the Olympic Park will be “cozier” than that used for this year’s Beijing games. The Chinese government spent four times the amount the 2012 organizers are planning to spend on the games.

London 2012: Olympic Media Debrief

London 2012 wants your feedback on your experiences at the Beijing Olympic and Paralympic Games. This is an important opportunity for all media who worked in Beijing to provide input towards the organisation of press facilities in London in 2012.

We would like to invite you to come to one of a series of workshops to be held in the LOCOG offices. We aim to keep numbers to 12 per workshop. A light lunch will be provided and, where possible, senior figures from LOCOG will also attend.

The workshops begin next week. The dates are: October 13, 14, 16, 17, 20, 21 and 24. Each session will run from 11am to 2pm. Places will be allocated on a first-come, first-served basis.

Where: 23rd Floor, One Churchill Place, Canary Wharf, London E14 5LN

Please RSVP – confirming which session you will attend – to Jayne Pearce, Head of Press Operations.

If you are unable to attend any of the sessions we would welcome your thoughts via email – please send to Jayne Pearce.

London Olympic Games Security To Cost Billions

Anti-terrorism measures will push the cost of Games security to an estimated £1.5 billion – nearly three times the original estimate – according to insiders.

The claim comes amid continued delays over a comprehensive security plan being devised by the Home Office and the Metropolitan Police.

Extra measures to protect athletes and spectators from an attack include drafting in the Army. Military helicopters will patrol overhead and jets will be on stand-by to protect a no-fly zone over the Olympic stadium in Stratford.

The Ministry of Defence would charge the Olympic authorities for such a deployment. The security operation is expected to be the largest in peacetime Britain with the two-week event classed as a major terrorist target. However detailed planning for policing and security is in its early stages.

Games chiefs are juggling security with the desire to stage a more open and accessible Games than in Beijing where large parts of the city were off limits to citizens.

Concern over Games security were raised at an Olympic fringe meeting of the Conservative Party conference in Birmingham yesterday.