London Olympic cost may hit $17.6B

POSTED: 1525 GMT (2325 HKT), February 24, 2007

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LONDON, England -- The cost of staging the 2012 Olympics could soar to £9 billion ($17.6 billion) -- nearly four times the £2.35 billion ($4.6 billion) estimated by London ahead of sealing the bid -- according to a report.

The BBC has alleged Saturday that the Treasury and the Department for Culture, Media and Sport are poring over the massive soar in costs, prompting some ministers to urge officials not to write a blank cheque for the Olympics.

In the wake of criticism of the government's management of the Games, Culture Secretary Tessa Jowell admitted in parliament last November that costs were set to rise to £3.3 billion ($6.4 billion).

However construction alone could equal that figure.

In addition, it is alleged that a £2 billion "construction contingency fund" will be set aside, with regeneration costs, VAT, and security taking the final outlay even higher.

The Shadow Culture Secretary, Hugo Swire MP, told the BBC: "There is no doubt that there will be real worries across the country about the huge increase in costs.

"It is time we got a proper explanation from (Chancellor) Gordon Brown on what has gone on and assurances as to what the government is doing to control the ever-increasing budget."

The Department for Culture, Media and Sport dismissed the report on Saturday as "just the latest of many figures" that have surfaced in the press.

A spokesman said: "Discussions are going on across government to resolve outstanding issues and we will make an announcement about long-term budget figures when these have concluded."

He also denied suggestions that there were tensions between Whitehall departments over the potential scale of the bill.

However, the Culture, Media and Sport Select Committee chairman, John Whittingdale, called on ministers to clarify costs soon and said the taxpayer should not write a "blank cheque".

"I think the total is going to be a lot bigger than was initially suggested, and what is important, I think, is that the Government comes out and gives a clear statement so that we can actually have some facts rather than continue to have figures bandied about which seem to rise by the week."