Contractors face fines for poor Olympic work

Contractors could face hefty penalities for late delivery or poor workmanship on projects for the 2012 Olympic Games if London secures the bid in just over two weeks' time.
An insider from London's Olympic bid team told CJ that the industry's reputation on delivering sports stadiums late and over budget - such as Cardiff's Millennium Stadium and more recently the Wembley National Stadium - had forced the team to seriously consider imposing "very high" penalities on contractors for poor performance and late delivery.
"The one thing we don't want is a repeat of the concerns raised over the delivery of the infrastructure at the games in Athens last year," the source said. "Although we want to work with the industry in an integrated way to alleviate any potential problems, the Wembley situation has got some thinking that the threat of heavy penalties might be one incentive to get things done right."
Prior to London's bid submission to the International Olympic Committee (IOC), the British Olympics Association had been working with contractors Mace and Laing O' Rourke to help with the planning and design of facilities, as well as gauging the capacity of the construction industry.
Industry can look forward to work worth at least £728m, a third of the overall costs of staging the Olympics if London's bid is successful. The capital costs of infrastructure will total £403m, while expenditure on land purchase and residual value, including the value of remaining buildings and infrastructure, will be valued at around £325m.
Work will include the construction of an Olympic village and an 80,000-seater Olympic Stadium in Stratford.
Full details of the procurement methodology won't be unveiled until after 6 July when the IOC chooses who will host the games. But CJ has learnt that, contrary to previous reports, there will be no PFI elements to the construction works, or packaged contracts.
A spokeswoman for London 2012 said: "It is not our remit to discuss penalties or procurement. We have to win the bid first. If successful, the London Organisation Committee of the Olympic Games will be formed to handle procurement."