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[Published: Sunday October 19 2008]

Credit crunch hits 2012Olympic games

London , 20 Oct-(ANA)- Two of the main venues in the Olympic Park may have to benationalised, with the taxpayer paying nearly 900 million extra as the creditcrunch hits the 2012 Games, The Times newspaper in London has reported.

The newspaper says ministerswill meet Boris Johnson, the Mayor of London, this week to consider ways ofmeeting the soaring bill after a lack of private investment.

Alistair Darling, theChancellor, Tessa Jowell, the Olympics Minister, and Hazel Blears, theCommunities Secretary, have yet to agree how to find the cash, with Ms Blearsresisting pressure to raid at least 250 million from her department.

Initially the privatesector was expected to meet the full 1 billion cost of the Olympic Village andat least half the cost of the 400 million media centre.

A deal was supposed tohave been reached with Lendlease, the developer of the Olympic Village, by theend of this year. But Lendlease has been unable to raise money because of thecurrent financial crisis and the athletes accommodation will now be unviablewithout extra government funds.

About 550 million ofgovernment funding has already been allocated for Stratford Parkand the infrastructure for the Olympic Village, including electricity cablesand water supply. But an extra 850 million to 900 million still had to befound for the village through a mixture of funding from housing associations,private investment and the taxpayer. So far no money has been guaranteed fromeither the private sector or housing associations.

The cost of the villagehas gone down marginally as the number of houses was cut from 4,000 to 2,800 asa result of the housing market slump. The reduction has already led to fearsthat accommodation will be cramped, with athletes sharing rooms. (ANA)

FA/ANA/20 October 2008---

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