Here we go again?
Olympic stadium costs look set to double
The construction company that will build the Olympic stadium has priced the job at more than double the budget planned when London was awarded the Games. London’s bid book quoted a £280m
cost for the stadium but Sir Robert McAlpine, the Olympic Development Authority's preferred bidder, says the cost will be more like £630m. The government and the ODA have conceded that to build an arena capable of downsizing from an 80,000-seat showpiece to a 25,000-capacity athletics venue after the Games would inflate the original price, but still envisaged a final cost of no more than £400m. According to a report in Construction
News, the ODA will have to either scale down its ambitions for the stadium or re- negotiate its terms. It quotes a source close to the negotiations saying: “McAlpine is in a very strong position because it knows the ODA can’t let them walk away because it would be a public- relations disaster for the Games.” “McAlpine wants to use its own team
of trade contractors and has put in £630m as an opening price. The ODA is now looking to get that price down by looking at less ambitious designs and renegotiating the terms. There’s going to be a lot of horse trading over the coming weeks.”
£375m Emirates Stadium on time and on budget, is determined not to be exposed to the cost overruns suffered at Wembley by Multiplex. Being the preferred bidder has allowed McAlpine to aim high, and the ‘horse trading’ referred to by the source will be a fraught process.
There is some suggestion McAlpine will call for a “costs plus” contract that loads all the construction risk on to the client. That open-ended bill would be rejected by the ODA, whose negotiations will centre on what cost savings can be
McAlpine, which completed Arsenal’s made.
A similar process involving Zaha Hadid’s £75m Olympic aquatic centre led to a redesign, though the architect stated it “was never about cost savings”. The ODA refused to acknowledge the reported figure McAlpine is demanding, noting that to do so would be insensitive with negotiations still ongoing. “We have already stated that we will not comment on speculation over figures,” said a spokeswoman. “We are making good progress in our discussions with Team McAlpine and hope to sign the contract with them soon.” The initial £3.4bn estimate for hosting the Games is rising fast. Last November Sir Roy McNulty, the acting chairman of the ODA, said additional security costs, a contingency fund and the unbudgeted VAT bill would take that figure “significantly higher”.
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