The Olympic Delivery Authority (ODA) announced yesterday that contracts have been signed for the construction of the two flagship 2012 venues, the £496m main stadium and the £303m aquatics centre.
Contracting joint venture Team Stadium, led by Sir Robert McAlpine with HOK and Buro Happold this week officially took over the main stadium site from ground works contractor Edmund Nuttall.
Balfour Beatty is expected to be handed the aquatics centre site by early summer and ODA chairman John Armitt said this week that he expected construction work planned would start ahead of the Beijing Olympics in August.
"We want to crack on with the work," said Armitt, pointing out that the stadium earthworks were three months ahead of schedule. "Every day now is a very valuable day."
ODA also said a third contract for the £80M Velopark complex would be let "in the coming weeks" with negotiations over the Olympic Village and media centre at "an advanced stage".
All the main construction contracts are let under the NEC target cost contracts and ODA has spent the last few months negotiating with contractors over the details of incentives and rewards based around these target costs
"We are operating an open book and an open picture to track progress against the target price," said Armitt this week. He said that he was confident that contractors would both not only hit the targets but also be able to make a profit on the work.
"The target prices have been agreed and we have a range of gain sharing incentives to drive performance," he said but added that there was a cap on the potential losses that contractors could face if the costs rose way over the target.
"We have base the target costs on a high level of detail by the designers," said Armitt, pointing out that the more work that it done now the more reliable the cost estimates would be. "If construction inflation or materials prices are much high than we have assumed the contractors will be insulated from this risk."
He said that the £496M budget for the main stadium included the both the cost to dismantle the stadium and reduce capacity from 80,000 to 25,000 and the programme management fees.
Armitt also confirmed this week that the ODA was close to formally announcing a decision to move the basketball venue to a new location alongside the velopark and relocating the fencing events to Excel. This move, he said would mean the fencing venue would not have to be build and so would save £70M.
Final negotiations with the British Olympic Committee and the individual sporting bodies were, he added, nearly complete.