2 1 min 15 yrs

Following on from Mike’s post yesterday concerning the chaos and incompetency that lies (and lies) behind the London 2012 Olympics, comes the news that Organisers of the 2012 London Olympic Games have discovered they may be facing a huge additional tax bill.  Tory Olympic spokesman Hugh Robertson said the government had assured him the £2.38bn cost of construction sites would not be subject to VAT. But the Treasury is demanding the tax, and has said European regulations state it cannot be seen to be supporting the organisers of the event.

This is but the beginning. Expect to see the costs of this enterprise spiral out of all control.

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  1. Whatever the original cost estimate was, double it. This is a good rule of thumb with large projects – the Channel Tunnel was a classic example. It comes from two reasons:

    1. The costs are always underestimated at the outset because the most optimistic assumptions are used in order to get the necessary political support for the project.

    2. A combination of mismanagement, unforseen construction difficulties and commercial fraud will take their toll. Towards the end, as the project slips behind schedule, costs will rise dramatically as overtime and premium rates are extorted by contractors and the customer has no choice but to pay up or risk not being ready on time.

  2. It badly needs both the hope, the cash injection and the major revitalising after years of doing nothing since the war. Had they been undertaken up til now, all in those costs over the years would no doubt have matched whatever is planned for the Olympics. Though what London stands to gain in revenue and facilities from the Olympics will make up for it.

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