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  • Olympics Minister Talks 2012 Budget, Legacy, Beijing Lessons, Chicago Messages - ATR Exclusive Interview


    12/06/07

    Jowell in her ministerial office at the Houses of Parliament this week. (ATR/Mark Bisson)  
    (ATR) London Olympics minister Tessa Jowell tells Around the Rings she will deliver a clearer picture of the overall Games budget within two weeks, including how much of the $5.5 billion contingency fund has so far been spent.

    And she says a more detailed breakdown of costs for the Olympic project will be published towards the end of January. Another report containing “probably 3,000 budget lines” is to be released at a later date.

    In an exclusive interview with ATR, Jowell admits that the Olympic venture is at a point in time where the risks are “at their greatest” but insists that “a resilient and reliable baseline budget” has been established and remains confident the Olympic venture will not exceed the $19 billion budget set in March.

    Jowell also spoke candidly about the Olympic Stadium's legacy, insisting that football and rugby teams can share the venue. And following recent trips to Beijing and Chicago, she also gave her views on 2008 Olympic preparations, China's human rights issues and the U.S city's 2016 bid campaign.

    After weathering the storm over the government's budget announcement in the spring, Jowell is under intense pressure to reveal the full scale of Games costs. The $19 billion budget is more than double London's bid book figure due to inflation, addition of VAT and $5.5 billion of contingency funding.
     
    Over recent months, the government has been accused of a lack of transparency on Games costs. Among the uncertainties are costs of venues and legacy conversion of the Olympic Park in east London.

    “It's an extremely difficult project. Are there unknowns that should cause anxiety and vigilance? Yes, there are,” Jowell tells ATR.

    At a meeting of the government's culture, media and sport select committee Tuesday, Olympic Delivery Authority chiefs admitted for the first time that they could not rule out spending all of the contingency money set aside to pay for cost overruns.

    Last month Jonathan Stephens, the permanent secretary at the DCMS, said that the only safe assumption was that the contingency fund would be used.
    Some parliamentarians have reacted angrily to LOCOG's growing budget. (ATR/M.Bisson)  


    Jowell says that four-and-a-half years out from London 2012, Stephens' admission “is an absolutely prudent statement of fact.”

    “But I can't give you an absolutely cast-iron guarantee that nothing will happen that nobody has calculated for,” she says, conceding that the $5.5 billion emergency fund could be swallowed up.
    Jowell insists that the people who have undertaken the baseline review of the budget “are some of the most respected in the construction and engineering industries, so we can have confidence in their conclusions.”

    “The baseline [budget] has hardly moved, so the March figure is pretty much the now figure. But I will announce this to Parliament very soon,” she confirms. “I will go into detail.”

    The announcement will come before the House of Commons rises for the Christmas break on Dec. 18. It could come next Monday when Jowell will speak in a scheduled Parliament session.

    Jowell presented the baseline budget figures to members of the Olympic Board Wednesday. The board also includes London Mayor Ken Livingstone, LOCOG chair Sebastian Coe and British Olympic Association chairman Colin Moynihan.
    British Olympic Association chairman Colin Moynihan says detailed financial reports are now being made available to the Olympic Board. (ATR/Mark Bisson)  


    Moynihan recently voiced concerns over the management of London's budget, calling for more transparency.

    But at the European Olympic Committees congress in Valencia last week, he assured ATR that “a lot of progress has been made.” He said that “detailed financial reports are now being made available [to the Olympic Board].”

    Jowell hints that her December update will include a breakdown of costs on the $1 billion Olympic Stadium and architect Zaha Hadid's aquatic center, expected to cost about $150 million, and other venues to be built on the 2.5 square km Olympic Park.

    She confirms that her January report will cover all venue costings among other elements of the Olympic project.

    “If you're talking about publishing every aspect of the Olympic project, you're talking about publishing the scope and program report. It has probably 3,000 budget lines,” she says, adding that she is “very happy that we publish that but we need to make sure that it's in publishable form.”

    In October, ODA chair John Armitt confirmed that the Olympic Stadium had increased by $432 million to $1 billion (77%) from the original bid figure, describing it as “a 2012 outturn cost” to include inflation, VAT, legacy conversion and earthworks.

    And Jowell admits the same calculations will be applied for all the venues. “We will have to uprate from 2004 prices all the venues to the price we expect them to be at outturn in 2012,” she says.

    Much interest lies in the legacy conversion cost of the Olympic Stadium and the bill for the post-Games transformation of the entire Olympic Park.

    Questions remain about the legacy of the HOK Sport-designed stadium, which will be converted from 80,000 seats into a 25,000 capacity multi-sports venue after the Games. But Olympic organizers have yet to secure a permanent tenant to help subsidize the venue in legacy mode.

    Jowell dismisses suggestions that the design lacks ambition and would fail to live up to the showpiece venues of other Games, including Beijing's Bird's Nest stadium.

    “You can't say let's have a great, iconic 80,000-seater stadium that will be a lasting monument to the Olympics, maintenance costs $20 million and rising a year, and have a sustainable Olympics,” she says.

    Asked if London football club Leyton Orient were close to securing a deal to move into the stadium, Jowell would only confirm that talks were taking place with the club “and a number of potential legacy tenants.”

    “I think we will have a number of tenants because of the nature of the stadium,” says Jowell, adding that football can ground share with rugby, athletics and community sport.

    The sale of the stadium naming rights, which would help subsidize post-Games operational costs, will be considered after the Olympics, she confirms. London Mayor Ken Livingstone has already committed to contributing $20 million a year to the legacy costs of the park, although the final bill will be significantly higher.

    The true nature of London's legacy plans will emerge in several reports from 2012 stakeholders next year.

    Lessons from Beijing

    Having visited Beijing several times in the past few years, the most recent trip being two weeks ago, Jowell says London legacy plans contrast sharply with those of the Chinese capital.

    Jowell admits the Bird's Nest and Water Cube (aquatic center) are stunning structures “but I do also think that they are the end of an era for an Olympics.”

    Although BOCOG says the Bird's Nest will be used as a national sports venue and for corporate entertainment and conventions post-Games, doubts remain over its financial sustainability in the years ahead.
    London's Olympics minister in conversation with Zhao Huimin, BOCOG's director of international relations, at the site of the Bird's Nest stadium. (David Shaw, British Embassy, Beijing)  


    “Have they nailed down the legacy? No, I don't think they have and that's in marked contrast to us who have built legacy in from the outset,” she says.

    Jowell claims to have built up a good relationship with BOCOG president Liu Qi and senior Beijing organizers. On the recent trip, she says her technical team learnt a lot about technology, logistics, ticketing and volunteering for 2008.

    Jowell also has a better understanding of the increase in the level of IOC scrutiny she can expect London to receive in the final years of preparations. “I want us to plan and be ready for that,” she says.

    She applauded BOCOG's volunteerism initiatives, saying: “I think they have been very clever and imaginative in looking at how these people are going to be engaged around the country discharging duties that have a relationship to the Olympics.”

    Last year, Jowell says she helped to persuade BOCOG president Li that he should take the initiative and provide freedom of movement for journalists in the run-up to the Games.

    While China has some way to go to improve media access and freedom of expression, she feels the situation is improving.

    Having talked to journalists “embedded” in China, Jowell echoed IOC president Jacques Rogge's recent comments on the country's human rights issue.

    “You can't expect the Olympics to unpick every aspect of an authoritarian regime,” she comments.

    “But what you can do is to use the Olympics to make the Chinese government through BOCOG discharge the commitments that they made in their bid book.”

    Messages for Chicago

    Jowell spent two days in Chicago last week, meeting leaders of the 2016 Olympic bid and underscoring the key elements of London's successful bid.

    She addressed the Chicago Metropolitan Planning Council and says she was generally impressed with the 2016 bid-set-up.

    “The regeneration and the venues that they already have in place are impressive,” says Jowell, stressing that she is in no way endorsing the Chicago campaign or any other 2016 bid.

    “They are very clear about what they don't know and what they have still got to develop.”
    Jowell addresses Chicago's Metropolitan Planning Council last week. (Metropolitan Planning Council, Chicago)  


    And what were Jowell's messages to Chicago's 2016 bid team?

    “Be very clear about what you want the Olympics to do for you and what you are going to give to the Olympics. Be very clear about your legacy,” she says, another point being: “The importance of building an Olympic bid as something which not only the bidding city but the whole country supports.”

    Asked whether she thought Chicago should be more transparent about the city's projected Olympics expenditures, Jowell says only that “it's very early for them to be clear about costs.”

    “There are all sorts of obstacles which mean you have to provide indicative costings that you then go on to verify,” she says.

    “That's been a process which has taken a couple of years [for London]. Sounds like a long time, it's a hell of a lot quicker than any other city,” Jowell emphasises.

    “My advice to them [Chicago] was really be prepared for the fact that the media will only be interested in the budget,” she says, a reference to her time spent fending off questions about the bill for the London Olympics.

    However, Jowell seems comfortable with the current state of London preparation.

    “The IOC are very happy with the progress we have made and they have confidence in us,” she says.

    “The British people are enthusiastic about the Games and have confidence in us. Support for the Games now is as high as when we won.”

    Homepage photo by David Shaw, British Embassy, Beijing

    With reporting from Mark Bisson in London.

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