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Stadium Bids Dwindle on Cost

London's planned stadium for the 2012 Olympic Games has drawn fewer than four bids after cost overruns on similar projects deterred candidates from the £280 million ($525 million) contract, five people with knowledge of the bidding process said.

The lack of competition to build the 80,000-seat stadium reflects concern about the costs and risks involved in high- profile projects. Delays in building England's new 757 million- pound Wembley soccer arena cost Multiplex, an Australian company, about $195 million in the year through June.

“After Wembley, I don't think contractors want to take on this level of risk on contracts that have such a high profile,'' said Rachael Waring, a construction analyst at Numis Securities in Liverpool. “There is no allowance for things going wrong. That's the turn-off.''. Plans for the event have already run into hurdles. U.K. Olympics Minister Tessa Jowell on Dec. 1 ordered proposals for a new swimming center to be resubmitted after they came in at almost twice the 75 million pounds that was budgeted.

Sir Robert McAlpine Ltd., a closely held U.K. builder, and URS Corp., a U.S. design company, are two of the companies competing for the contract, according to the people, who declined to be identified because the contenders' names haven't yet been disclosed. Vinci SA and Bouygues SA, the world's two biggest building companies, said they won't bid for the project. McAlpine, which is more than 130 years old, is also revamping London's Millennium Dome into a 23,000-seat arena that will host the World Gymnastic Championships in 2009 and indoor sports at the Olympics three years later.

URS, the world's biggest engineering-design specialist, has formed a partnership with London-based architectural practice Foster & Partners to bid for the contract. San Francisco-based URS helped design a 51 million-pound project to rebuild Glasgow's Hampden Park stadium, Scotland's national soccer arena, by replacing the south and west stands. URS plans to seek a share of London Olympics work, Chief Executive Officer Martin Koffel said in a May interview. Foster, which designed Wembley Stadium with architectural company HOK Group Inc., was set up in 1967 as Foster Associates by Sir Norman Foster..

Sir Robert McAlpine, based in Hemel Hempstead, southern England, has teamed up with HOK, the people said. The two companies together planned and built Arsenal's 60,000-seat Emirates stadium in north London, which cost 357 million pounds. St. Louis-based HOK, founded in 1955, also designed the 110,000-seat Telstra Stadium for Sydney's Olympic games in 2000 at a cost of A$690 million and Heinz Field for the Pittsburgh Steelers.

Sophie Kernon, 29 9 06, Bloomberg

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