LONDON 2012's true construction cost will be £8.6bn, engineers polled by NCE said this week.
A survey of key industry figures combined with this week's NCE 500 reveals that on average, engineers believe Olympic bosses should add an additional 39% to the fnal worst case budget of £6.2bn (excluding VAT) as a contingency sum to allow for cost overruns.
This includes costs to cover the delivery partner role, increased security, regeneration and VAT add up to a total construction bill almost four times the £2.4bn put forward in London's bid to host the Games.
(see analysis, page 14).
However the Treasury is pushing for a 60% contingency figure which if adopted could push the final bill up to just under £10bn. Add VAT and the bill could hit £11.6bn.
London mayor Ken Livingstone would accept a 20% contingency, while the Olympic Delivery Authority (ODA) is arguing for 30%.
Livingstone said: 'I'm not looking for any contingency. If you have it at 60%, then everybody bidding for the contracts will know that you have a huge pot of money if they screw it up.' However, he added that he would be prepared to accept 20%.
A nal construction budget is expected to be published as part of the ODA's Corporate Plan in February 2007.
One cost consultant supported the Treasury's view and said setting a contingency of less than 50% was unrealistic.