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LONDON - The government more than doubled the estimated cost of staging the 2012 London Olympics to 9.3 billion pounds ($25.9 billion) today, drawing charges of "massive financial incompetence" from an opposition party.
Sports minister Tessa Jowell's announcement confirmed that the expense of staging the Olympics would be
far higher than thought when Britain was awarded the games in July 2005.
London's bid estimated the cost of building the main Olympic sports infrastructure in east London at about 3 billion pounds and threw in another 1 billion pounds for regeneration of the dilapidated surrounding area.
Now the government is budgeting billions more for construction, security, tax and contingency funds.
Jowell said the government would stump up an extra 4.93 billion pounds to fund the games and urban regeneration and that nearly 1 billion pounds more would be needed from London taxpayers and the proceeds of Britain's national lottery.
The new funding comes on top of the 2.38 billion pounds in London tax and lottery proceeds and 1 billion pounds from the government that were originally earmarked for the Olympics.
"The London Olympics are a project that will change Britain for the better, forever," Jowell told parliament.
The games would bring "huge financial gain" to Britain and act as a catalyst for the most ambitious regeneration programme in recent memory, she said.
There has been a history of delays and cost overruns for such major projects as the Millennium Dome and Wembley stadium.
Financial incompetence
Hugh Robertson, sports spokesman for the Conservative Party, slammed the government for not including value-added tax and a contingency fund in its original estimate.
"The fact that the Olympic budget has almost trebled in just a year is a sign of massive financial incompetence from the government," he said in a statement.
"What confidence can we have that the government will not be back asking for yet more money in years to come?," he asked.
Mayor Ken Livingstone said the Olympics would bring huge benefits to London with 40,000 new homes and record investment in transport.
The Olympic Delivery Authority, overseeing construction of the Olympic venues, said the early publication of its budget "gives us the clarity and certainty to build on the excellent progress we have already made."
Sebastian Coe, chairman of the London Olympics organising committee, also welcomed the budget, saying the games would be "the most positive, extraordinary opportunity we have to change the face of sport and the landscape of east London".
The government has been under pressure from the International Olympic Committee, legislators and the public auditor to be clearer about the cost of the games.
Fears over spiralling costs have soured the euphoria that gripped London when it was awarded the Olympics.
Jowell said on Thursday that the budget for construction costs was now estimated at 5.3 billion pounds.
The government also budgeted 388 million pounds for the Paralympics, 600 million pounds for policing, 836 million for tax and 2.25 billion for a contingency fund.
A day after winning the right to hold the games, four British Islamist suicide bombers killed 52 people on the London transport system. London's police chief has said the 2012 Olympics would be a "huge target" for terrorists.
- REUTERS