The British government now owns the London 2012 Olympic Village. The government confirmed Wednesday it has pumped a further 324 million pounds of public money into the project, reports the Times.
Prior to the economic slump the one billion pound village, which includes 2,800 apartments, was conceived as a privately funded project, which was later switched to a public-private proposal. But the deepening recession has meant that the public sector must take on an increased level of risk, the Department for Culture, Media and Sport confirmed.
Olympics Minister Tessa Jowell said, “a private sector deal was available but because of the credit crunch it was not a good deal. By funding the entire project, the village will become publicly owned and the public purse will receive substantial returns from sales. The Olympic Delivery Authority (ODA) will make a fresh assessment of the market nearer to completion with a view to pursuing deals with other possible investors”.
The 324 million pounds announced Wednesday includes 261 million pounds from the contingency fund and 63 million pounds from savings elsewhere in the 9.325 billion Olympic project.
The government and the ODA insist that the extra 324 million pounds of public investment will be returned after the Games are over and when the flats are sold.
Shadow Olympics minister Hugh Robertson said, “today’s announcement means that 55 per cent of the original 2.7 billion pound contingency budget has been used up delivering 36 per cent of the project – this has to be a cause for concern. The lack of private sector funding for the athletes village is a direct reflection of the severity of the current economic downturn. As soon as markets improve, it must be sold to the private sector and today’s outlay recouped for the taxpayer”.
