LONDON-The cost of the 2012 Olympic Games has soared by 40%–or euro 1.3 billion ($1.7 billion)–to euro 4.9 billion ($6.3 billion). Culture Secretary Tessa Jowell says that the increased costs were due in part to rising costs of commodities like steel, which had doubled in price, and revised transport costs.

Construction inflation is expected to run at 6.5% a year until 2012 primarily because massive development in the Middle East and China has led to a relative shortage of supply in building materials. But Jowell warns that costs could rise further still. The current euro 4.9-billion ($6.3-billion) cost does not include regeneration. The land set aside for the development is heavily contaminated and government advisers put increased costs of disposing toxic waste at euro 118.5 million ($152.6 million).

Neither does it include the cost of VAT on materials and completed buildings. The Treasury has not yet decided whether or not to waive this bill, which could cost anywhere between euro 370 million ($477 million) and euro 1.5 billion ($1.9 billion).

Despite the rising costs, London Mayor Ken Livingstone remains optimistic. “I will make a prediction to you now,” he states. “These games will make a profit. We have taken the most rundown and polluted place in southern England. On the back of the games, we’re going to regenerate it. It will be a vibrant new area.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.