The London Organising Committee (Locog) and the ODA — the two bodies handing out work for the Olympics — will, over the coming six years, find themselves at the centre of one of the biggest contract scrambles in British history. And the event will offer rich pickings for companies big and small.

Landowners with holdings around the Olympic site are expected to benefit from soaring values. One property expert said that on average land values had risen from £1.25m an acre to £4m an acre. Aitch Group is just one of the housebuilders expected to benefit from the Olympic effect. It has started construction on a 22-storey residential tower bordering Stratford High Street, within walking distance of the Olympic site. The building is due to be completed in 2008.

John Watson, chief executive of Bellway, the Newcastle-based housebuilder, is sceptical the Olympics will boost prices. He argues that a shortage of construction workers may even drive up costs for the scheme. “The idea that Olympics equals benefit is too simplistic,” he said.

Neither the Department for Culture Media and Sport, ODA nor Locog are able to give clear-cut answers to questions about the likely final bill. Tessa Jowell, the culture secretary, told a parliamentary select committee last week that the cost of the Olympic park in east London was expected to rise from the £2.4 billion quoted in the original bid to £3.3 billion.

She cited increased security costs and a doubling of steel prices plus inflation in the construction industry. The Construction Products Association has challenged her comments on steel. Michael Ankers, chief executive, said that since the original Olympic bid was submitted, steel prices have actually fallen by about 8%.

From: Focus: Going for gold, Jenny Davey and Ben Laurance, Sunday Times, Business News, 26 Nov 06

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