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Olympic Stadium costs soar to more than £600m after roof complications Olympic Stadium costs soar to more than £600m after roof complications
(35 minutes later)
The overall bill for the Olympic Stadium is set to soar well beyond £600m before West Ham United move in, after it emerged that installing the complex roof would be far more expensive than originally thought. The overall bill for the Olympic Stadium is set to soar well beyond £600m before West Ham United move in after it emerged that installing the complex roof would be far more expensive than originally thought.
The complications will not cost West Ham, due to move into the 54,000-seat stadium from the start of the 2016-17 season, another penny on top of the £15m they have pledged towards the conversion. The complications will not cost West Ham – due to move into the 54,000-seat stadium from the start of the 2016-17 season – another penny on top of the £15m they have pledged towards the conversion.
Construction Enquirer magazine reported that Balfour Beatty had asked for an extra £50m to cover complications in strengthening the roof and extending it over a new cantilevered structure that will cover retractable seats to be rolled out during the football season.Construction Enquirer magazine reported that Balfour Beatty had asked for an extra £50m to cover complications in strengthening the roof and extending it over a new cantilevered structure that will cover retractable seats to be rolled out during the football season.
It adds to the workload to complete the project by August 2016 – itself an extension of the original timetable. Building must pause during the 2015 Rugby World Cup next summer, when five matches will be held in the stadium. It adds to the workload to complete the project by August 2016 – itself an extension of the original timetable. Building must pause during the 2015 Rugby World Cup next summer, when five matches will be played in the stadium.
Sources at the London Legacy Development Corporation, which is responsible for the development of the Olympic Park, insisted that the overspend would not be as much as £50m and that some of it would be met by Balfour Beatty. It said any overspend would be covered within the LLDC’s wider existing budgets without recourse to the taxpayer and that there would be no ramifications for the schedule.Sources at the London Legacy Development Corporation, which is responsible for the development of the Olympic Park, insisted that the overspend would not be as much as £50m and that some of it would be met by Balfour Beatty. It said any overspend would be covered within the LLDC’s wider existing budgets without recourse to the taxpayer and that there would be no ramifications for the schedule.
The rising costs are likely to provoke renewed criticism from those who think the project has been badly thought-out from the start.The rising costs are likely to provoke renewed criticism from those who think the project has been badly thought-out from the start.
In addition to the £154m contract agreed with Balfour Beatty, which will rise because of the roof issues, there are believed to be additional elements that will take the overall cost to more than £600m by even the most conservative estimate.In addition to the £154m contract agreed with Balfour Beatty, which will rise because of the roof issues, there are believed to be additional elements that will take the overall cost to more than £600m by even the most conservative estimate.
Following a protracted saga that included a bitter battle with Tottenham Hotspur and a lengthy standoff over how much West Ham should contribute, the East End club agreed to pay a one-off fee of £15m towards the conversion costs and a rent of around £2.5m a year.Following a protracted saga that included a bitter battle with Tottenham Hotspur and a lengthy standoff over how much West Ham should contribute, the East End club agreed to pay a one-off fee of £15m towards the conversion costs and a rent of around £2.5m a year.
The LLDC, chaired by Boris Johnson, is in negotiations with Balfour Beatty over how the additional costs will be split.The LLDC, chaired by Boris Johnson, is in negotiations with Balfour Beatty over how the additional costs will be split.
Under the terms of the deal announced in March last year Newham Council borrowed £40m towards the conversion, the Department for Culture, Media and Sport supplied £38.7m and a further £25m will come from the Department for Communities and Local Government. West Ham will pay £15m and the rest will be borrowed by the LLDC.Under the terms of the deal announced in March last year Newham Council borrowed £40m towards the conversion, the Department for Culture, Media and Sport supplied £38.7m and a further £25m will come from the Department for Communities and Local Government. West Ham will pay £15m and the rest will be borrowed by the LLDC.
The LLDC had previously argued that the Balfour Beattie agreement was a fixed price contract but it is understood that an element relating to the roof is negotiable, given the complexity of the work.The LLDC had previously argued that the Balfour Beattie agreement was a fixed price contract but it is understood that an element relating to the roof is negotiable, given the complexity of the work.
Originally the Olympic Stadium was costed at £280m in the London 2012 bid book before the price tag rose to £429m. The initial plan was to remove the upper tiers of the stadium and scale it back to a modest 25,000-seat bowl after the Games. But the coalition government and Johnson urged a rethink in 2010 and eventually agreed a deal with West Ham that later collapsed under legal challenge. Originally the Olympic Stadium was priced up at £280m in the London 2012 bid book before the price tag rose to £429m. The initial plan was to remove the upper tiers of the stadium and scale it back to a modest 25,000-seat bowl after the Games. But the coalition government and Johnson urged a rethink in 2010 and eventually agreed a deal with West Ham that later collapsed under legal challenge.
Following another tender process, the club were awarded a 99-year lease to share the stadium with other tenants including UK Athletics. An operator such as AEG or Live Nation will shortly be appointed to manage bookings in the stadium.Following another tender process, the club were awarded a 99-year lease to share the stadium with other tenants including UK Athletics. An operator such as AEG or Live Nation will shortly be appointed to manage bookings in the stadium.
A spokesperson for E20 Stadium LLP, the partnership that is managing the stadium, said: “The project still has close to two years to run and we are in no doubt Balfour Beatty can deliver the programme as planned. This is a complex project and there are always ongoing discussions about specific elements within it.”A spokesperson for E20 Stadium LLP, the partnership that is managing the stadium, said: “The project still has close to two years to run and we are in no doubt Balfour Beatty can deliver the programme as planned. This is a complex project and there are always ongoing discussions about specific elements within it.”