Credit crunch hits 2012 Olympics
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Two of the main venues in London’s Olympic Park may have to be nationalised as the credit crunch hits the 2012 Games, The Times of London has learnt. UK taxpayers are facing an additional tax bill of GBP900 million (US$1.56 billion).
UK government ministers will meet the Mayor of London, Boris Johnson, this week to discuss ways of meeting the soaring bill after a lack of private investment. Initially the private sector was expected to meet the full GBP1 billion cost of the Olympic Village and at least half the cost of the GBP400 million media centre.
A deal was supposed to have been reached with Lendlease, the developer of the Olympic Village, by the end of this year. But Lendlease has reportedly been unable to raise funds because of the current financial crisis.
The Times reports that about GBP550 million of government funding has already been allocated for the Olympic Village, but an extra GBP850-900 million still needs to be found for through a mixture of funding from housing associations, private investment and the taxpayer. So far no money has been guaranteed from either the private sector or housing associations.
John Armitt, Chairman of the Olympic Delivery Authority, said that in the worst-case scenario UK taxpayers might have to foot the whole bill.
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