When is a cost overrun not a cost overrun?

We don’t usually cover European stadia here – not until our budget request for a team of research interns is met, anyway – but this one seems worth noting: Britain’s Olympics authority announced yesterday that its stadium for the 2012 Summer Games will cost 496 million pounds (slightly over $1 billion), not the 280 million pounds ($570 million) that was originally projected. But, says Olympic Delivery Authority chair John Armitt, just because the cost has doubled doesn’t mean that the cost has, you know, doubled:

Armitt said the revised figure was “exactly in line with budget”, and told a meeting of the London Assembly that it was “grossly misleading” to suggest that the cost of the stadium and other facilities had doubled since 2005. He told the Assembly that the huge increase in the revised figure could be explained by inflation – the bid book was based on 2004 prices – the inclusion of VAT which had been omitted from the original calculations, converting the stadium from its temporary Olympic capacity of 80,000 to its 25,000 permanent capacity, and additional construction costs, including earthworks on the site. “To suggest that costs have doubled from the bid book represents a grossly misleading figure for the public,” he said.

So it’s just $400 million in expected overruns. Isn’t that reassuring?

One comment on “When is a cost overrun not a cost overrun?

  1. Depressing to see this, a case of the father becoming the son. THEY’RE “learning” from us?!