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MPs concerned about diminishing contingencies for London Olympics


London : The government’s financial watchdog Wednesday welcomed the progress on main construction projects associated with the 2012 Olympics being held in London, but expressed concern about the “tight” position of the budget.

The Public Accounts Committee (PAC) also warned that British taxpayers would be left with the burden of paying for budget over-runs if the London Organising Committee of the Olympic Games and Paralympic Games (LOCOG) does not prove to be self-financing.

“Of the sum left within the Olympic budget for contingencies, £1,270 million, most is currently earmarked for known risks. But unforeseen problems continue to emerge to place fresh demands on the contingency,” said PAC chair Edward Leigh.

“As we have seen, the economic downturn has already led to the Olympic Village and Media Centre having to be funded by the taxpayer. And the unplanned work to secure and maintain the Olympic Park after construction could require a further £160 million of the contingency,” Leigh warned.

The government originally set a £9.3 billion budget in March 2007 to pay for the cost of delivering the Olympics in London for the first time since 1948.

“The body responsible for putting on the events themselves, LOCOG, is intended to be self-financing, partly through ticket sales and merchandising. But if it exceeds its budget, the taxpayer will have to make up the difference,” Leigh also said.

He said the government should immediately say if there is any chance of the budget being exceeded and that the committee also wanted to know how LOCOG intends to balance the need to raise income from ticket sales with its commitment to be affordable prices.