LONDON 2012's true construction cost will be $16.6bn, engineers polled by NCEI have said.
A survey of key industry figures reveals that on average, engineers believe Olympic bosses should add an additional 39% to the final worst case budget of $12bn (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 $4.7bn put forward in London's bid to host the Games.
However the Treasury is pushing for a 60% contingency gure, which, if adopted, could push the final bill up to just under $19.5bn. Add VAT and the bill could hit $22.7bn.
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 final construction budget is expected to be published as part of the ODA's Corporate Plan in February.
One cost consultant supported the Treasury's view and said setting a contingency of less than 50% was unrealistic.