London 2012 faces "tight" financial situation
The London Olympics face a "tight" financial situation, with only 194 million pounds (USD 290 million) available to cover any new risks in the run-up to 2012, a parliamentary committee warned.
London: The London Olympics face a "tight" financial situation, with only 194 million pounds (USD 290 million) available to cover any new risks in the run-up to 2012, a parliamentary committee warned.
The Committee of Public Accounts also raised concerns about how organisers LOCOG intend to raise 400 million pounds from ticket sales while balancing its commitment on affordability.
"The position is tight, with no room for complacency and limited flexibility to respond to new problems as the Games approach," said committee Chairman Edward Leigh.
Construction of the Olympic Park in east London is on time and within the 9.3 billion pound budget, the committee noted. It praised the Olympic Delivery Authority (ODA) for controlling costs and finding savings across its programme, especially after the collapse of private funding for the Olympic Village and media centre during last year`s credit crunch.
But of the original 2.74 billion pounds of contingency, only 1.2 billion remain, and all but 194 million of that is currently earmarked for known risks.
Unforeseen costs continue to arise, including a recent 276 million pound bill to secure the Park after construction.
Staying within budget also depends on receiving about 600 million pounds of receipts from the Olympic Village.
LOCOG aims to raise the 2 billion pounds it needs to stage the Games through sponsorship, merchandising and ticket sales, and has attracted 70 percent of that total so far.
Tickets do not go on sale until next year, but the committee called on LOCOG to publish now the principles on which ticket availability and prices would be determined.
It said it was "reasonable to assume" tickets for a family of four could cost about 100 pounds, with prices varying according to each event.
The committee also urged LOCOG to establish a contingency fund to protect against failure to raise the funds.
The government aims to repay 675 million pounds of the 2.1 billion pounds the National Lottery has put up for the Games through future profits on the sale of Park land and assets, but the committee noted there was no guarantee on the value and timing of that payment.
Responsibility for security in certain areas has yet to be resolved, such as the "grey space" between the transport hubs and Park venues, the committee said. It called on the government to make clear who has overall executive authority.