2012 Olympics cost rises by £21m

Costs have risen...

The cost of London's 2012 Olympic Games has risen by GBP£21 million due to a drop in expected land receipts.

While the cost of the games has stayed well with its GBP£1.25 billion contingency, the Olympic Delivery Authority, the body in charge of building the games, has assured that the increase was inevitable in the latest progress report.

John Armitt, Olympic Delivery Authority Chairman, said: "We are continuing to make strong progress across the project. There are however still big challenges ahead as construction accelerates across the site and the workforce peaks.

"This will be our toughest year. We take nothing for granted but I am confident that the foundations for success are now in place."

Increased prices

While the rise is mainly due to the drop in expected land receipts from selling Olympic Land after the games, and works to plan and procure the operation of the Olympic Park between 2011-13, the ODA has still managed to make major cost reductions in some areas.

For example, the ODA reported that they managed to knock GBP£13 million off the price of the broadcast centre and GBP£55 million off the cost of infrastructure and site remediation. In addition GBP£54 million has been written off the expected spend because of reduced risk.

However, some small adition costs have occured. Due to land receipts falling by GBP£150 million, an extra GBP£9m is being paid to programme delivery partner CLM for successfully hitting project milestones.

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