15 Oct 2008

London scales back Olympic plans

10:11 pm on 15 October 2008

The credit crunch could have a silver lining for the hard-pressed organisers of the London 2012 Olympics who can now scale back their grand designs with the full blessing of the public and the IOC.

The rationing and homemade kit of 1948 when war-weary London's hosting was dubbed the "Austerity Games" should not be necessary this time but athletes arriving in 2012 will not be greeted by the mega-structures of Beijing.

Flat-pack stadiums are likely to be the order of the day while several of the original bid's planned temporary venues could be scrapped for existing buildings in an effort to stay within the Stg9.3 billion budget.

In normal circumstances the International Olympic Committee would frown upon changes to the original bid document. Times have changed, however, and cost-cutting measures could even get a nod of approval from the corridors of power in Lausanne.

Chris Higson, professor of accounting at the London Business School, said the credit crisis provided the opportunity to pare down ambitions "without losing face".

On Wednesday, cabinet ministers meet to discuss security planning for 2012 primarily but financing the Games is likely to be very much part of the debate too given the growing concerns surrounding the country's ability to bankroll an Olympics.

Fencing has already been moved to a shared venue, while the shooting, basketball and equestrian sites are under review.

London has plenty of options in terms of sporting venues, but the biggest concerns surround the two public-private sector projects in the Olympic Park - the estimated Stg1 billion pound athletes' village and the Stg400 million media centre.

An inability to secure bank loans could result in a possible shortfall of up to Stg250 million, Olympic authorities said.

The slump in property prices, which could damage the chances of recouping money from the athletes' village after the Games, has also resulted in the number of post-Olympics apartments being reduced from 4,200 to 3,000.

The London Organising Committee of the Olympic Games said companies had not been put off by the credit crisis so far, with more than Stg 400 million having been raised so far.