Half price plan for Olympic Village

Contractors being quizzed about cheaper ways to build the Olympic Village believe they can cut the £1bn budget in half.

CJ understands that London 2012 chiefs are looking to save money on the athletes' village by drafting in firms to build residential blocks on fixed-price contracts.

The Olympic Delivery Authority is desperate to slash the budget after revealing public cash may be needed to fund the whole project because developer Lend Lease is struggling to raise its share of the capital.

Specialist residential builders are now being approached by the ODA as the procurement of the job adapts to the economic climate.

One contractor said the 2,800-flat village could be built for between £450m and £500m -half the current budget.

He said: "The whole game has changed now. It is all about value for money - and the best value for money for the ODA will be to get a firm in who can guarantee to build it for a fixed-price lump sum."

Lend Lease is development manager on the job and was planning to run the site on a construction management model.

The source said: "That system of being construction manager, sub-letting all the packages and just taking a fee doesn't really stack-up now.

"You only need one trade contractor to go down and the whole thing stalls. There are firms that can do it all with in-house labour for a fixed price, which has to be a better solution."

Piling work is currently underway on the site where a 300-strong construction team is preparing the foundations.

A 14-strong team of architects has been commissioned to design the village. One contractor said: "A fortune has been spent on this already. The fact that there are 14 architects there tells you all you need to know about cost control so far."

An ODA spokesperson said: "Lend Lease are appointed as development, project and construction managers for the development of the Olympic Village. This situation has and will not change.

"It has always been the plan to procure other contractors for parts of the job, under the supervision of Lend Lease, so Lend Lease and ourselves have had early discussions with potential contractors as a routine way to explore the current market. The procurement of the project has not changed."