Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Government to fund Athletes Village development

The government is to fund the construction of the 2012 Athletes Village, developers Lend Lease have said.

The government is expected to announce today a £300 million shortfall in funding for the project, the Evening Standard has reported.

In a statement today Lend Lease said: “Following a meeting of the Ministerial Funders’ Committee Lend Lease has today been advised by the ODA that the UK government will fund development of the Athletes Village, Stratford City, without sourcing private funding.

“Lend Lease will continue to design, develop and build the Village, under an existing Development Management Agreement which was signed in August 2008.

“Under the terms of the Development Management Agreement, Lend Lease receives a fee for service, net of costs. Profits will start to be realised in the financial year 09/10 and emerge progressively over the lifecycle of the development.

There will be a quarterly update on the Olympic Budget today, the Evening Standard said. There is speculation that developers Lend Lease have failed to raise their share of the money for the project as the firm struggled to convince banks to invest in the scheme.

The report today will be presented by Olympics auditor David Goldstone and ODA chief executive David Higgins.

Construction of the village is being split betweeen Bovis and other contractors yet to be decided.

Five firms - Bouygues, Galliford Try, Barratt East London, Wates and Ardmore Construction - are understood to have been asked to submit tenders to develop the first residential plot for the job.

Dan Labbad, CEO of Lend Lease Europe, said: “Lend Lease submitted a highly competitive bid which offered to invest equity of £150 million in the project but the government and the ODA have decided that the overall risk return criteria for this type of project in the current market environment is not conducive to private funding. 

“The Athletes Village team has done extremely well in mobilising nearly 300 people from a standing start in just 18 months. We’re on schedule to deliver ahead of time under an attractive fee deal and we remain prepared to invest equity in the project.

“Our focus continues to be on successfully delivering a world class development of high architectural and design quality, both as a home for athletes in 2012 and as an iconic sustainable community beyond.

“Lend Lease has always maintained that the opportunities presented by the regeneration of Stratford City extend beyond the Olympic Games and we will continue to explore options for our long term involvement.”

Read more:

Read the Evening Standard story

Olympic village work bidders named