London's Olympic Preparations

While many rejoiced last year when London was awarded the right to host the 2012 Olympic Games, there were also some who worried that this honour could turn out to be something of a white elephant for Britain, not only in sporting terms, but also a potent political and economic mess. So far there have been no significant causes for alarm, but the gentle reminder from Juan Antonio Samaranch, the president of the International Olympic Committee, that time is ‘going very fast’ highlights that there is still a lot to be done.

Certainly in terms of the construction process there is one worrying precedent: the Wembley national football stadium. Wembley is the world famous ‘home of football’, the heart of the game in the country where it all began. A few years ago the Football Association (FA) decided the time was right to demolish and completely rebuild this charismatic but ageing stadium. However, the whole project has been beset by financial problems and continual delays in construction. It was initially promised that the new arena would be ready for action at the beginning of 2006, but this target has been massively and embarrassingly overshot, with construction work still ongoing and as yet no concrete completion date has been given. There have been arguments between the FA and Multiplex, the Australian construction company overseeing the project, and also some worries over the safety of the work after an accident earlier this year. The second problem has been the massive cost of the project. While it is claimed that Wembley will be the greatest stadium in the world, it will also be the most expensive, with final costs predicted to come in at a massive £757m ($1.4bn). What makes this figure all the more dramatic is the fact that when the FA were originally planning a new stadium back in 1996, they estimated a cost of just £200m. Meanwhile the Welsh have erected a world-class, 74,500-capacity arena of their own in Cardiff, the Millennium Stadium, for a bargain price of £126m.

Worryingly, the organisers of London 2012 have already announced that the costs of the project will be £1.5bn higher than originally predicted, with the total bill currently standing at £5bn ($9.5bn). With another six years to go until the Olympics, it seems fair to expect a few more unexpected budget increases. Of course this money will largely be coming out of the taxpayers pocket, with one proposed scheme to introduce an ‘Olympic tax’ for Londoners. Most cities who have hosted the Games in recent years have struggled to meet the financial costs, and many spend years paying off the debts accrued.

There are also worries in terms of how Britain’s athletes will perform at the games themselves. In general, there as been a marked lack of success at recent Olympics (although with some high-profile exceptions), and football, one sport in which the British generally excel at, is an event that Britain does not even compete in at the games due to complications over the separate status of the English, Scottish, Welsh and Northern Irish national teams. There are, however, efforts underway to create a British soccer team for the 2012 games, with the English extremely keen on the idea but the Scots stubbornly refusing to consider something which they claim would affect the independence of their national side.

The project has the potential to present to the world an image of a modern, successful and booming London, while it also promises to regenerate a poor and neglected area in the east of the city. There are though many who argue that London is well known enough without needing such an expensive showcase and that improving underdeveloped areas should be a priority of the government anyway. While it is too early to get overly pessimistic about the London Olympics, there remains a lot of work to be done and some worrying precedents in financial and sporting terms. Hopefully though the organisers will learn from rather than repeat mistakes of the past.

UPDATE: In the couple of days since writing this blog there have been further developments relating to London's Olympic bid. One London evening newspaper has run with the story that, allegedly, the initial budget for the Olympic project was put together in an informal one-hour chat on the sofa between Ken Livingstone, London's mayor, and Tessa Jowell, the Culture Secretary. According to a new book by London's communications director, Mike Lee, neither Jowell nor Livingston actually expected their bid to beat the likes of Paris and Madrid, with the latter quoted as saying 'If we win the Games it will have been a complete bloody accident.' This, it seems, may explain the rather slipshod and informal attempt to put together a budget figure. although this does not excuse it. It is also revealed that £625m was expected to come from London taxpayers and £1.5bn from the National Lottery fund, although it can be assumed that both these figures will rise along with the escalating csots of the project.

Speaking of which, the news this evening has been reporting Jowell's announcement today that the initial budget will now be increased by a massive 40%. She has rather flimsily tried to highlight the fact that the part of the budget set asied for regeneration of the local area is an optional but worthwile cause. This is simply an attempt to side step the fact that it appears that Livingstone and Jowell, the architects of this project, either lied to the government and public about costs in an attempt to garner support or were simply incompetent when calculating figures on the sofa over a cup of tea.