The chairman of the Public Accounts Committee (PAC) has revealed the £9.3bn budget to deliver the London 2012 Olympics is “worryingly tight”.
Edward Leigh said while building work on the Olympic site is progressing well and is on track for test events in 2011, the contingency funds could be hit with problems.
According to latest figures, the Olympic Delivery Authority (ODA) has just £1.2bn left of the £2.7bn contingency fund.
The PAC report revealed most of the remaining funds are already earmarked to meet predicted risks. It said just £194M will be left.
Leigh, speaking as PAC published its report into the preparations before the 2012 Games, said: “Of the sum left within the Olympic budget for contingencies, £1.27bn, most is currently earmarked for known risks. But unforeseen problems continue to emerge to place fresh demands on the contingency.”
Another £160M of contingency could be called upon to cover previously unplanned work to secure and maintain the Olympic Park between the end of construction to the handover to the Olympic Park Legacy Company (OPLC).
The £9.3bn budget, triple that of original estimates, was set in March 2007.
The report concludes: “Staying within the budget also depends on receiving some £600M receipts from the Olympic Village development. So the position is tight, with no room for complacency and limited flexibility to respond to new problems as the Games approach”.
An ODA spokesperson said: “The foundations for success are in place but we are in no way complacent.”
A Department for Culture, Media and Sport spokesman said: “We have continued to make savings across the project with the anticipated final cost of the construction programme estimated to be around £7.2bn from an overall Olympic Delivery Authority budget of £8.1bn.
“Nevertheless, we are not complacent and we recognise that there are many challenges ahead. We will continue to work hard with all the delivery partners to ensure that we achieve the best value possible.”