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All to pay for, by David Harding

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22 July 2005

London won the right to stage the 2012 Olympics on the strength of the legacy that it will leave behind for deprived areas such as east London. So will transport, housing and other facilities be transformed after the £3.8bn gold rush? David Harding reports

Four billion pairs of eyes, according to estimates, will be trained on Stratford, east London, in 2012. It is lucky they are not looking now. Because, even on a glorious summer's day with the sun beating down on Stratford's ultra-modern steel and glass Underground station, there is very little to see.

In truth, it looks more suitable a site for the last time London held the Olympics, the 'Austerity Games' in 1948, when athletes were housed in private homes, schools and army barracks left over from the Second World War.

The total cost of the games then was £600,000. In 2012 it will cost some £3.8bn. It would take the greatest of visionaries to imagine that the Olympics could take place here in a little over 2,500 days' time. But, there will soon be a £70m, 20,000-seater aquatics centre designed by architect Zaha Hadid, with an S-shaped roof to symbolise the flow of water. Scan the horizon and you can see where there will be a world-class £37m velodrome and BMX track at the Eastway Sports Centre, fit for use by the planet's best cyclists.

Stratford will also house more than 17,300 international athletes in a £600m Olympic Village, complete with such essentials as fountains, hairdressers and Internet access. After the games, the village will be converted into 3,600 homes for locals.

Nearby, the former Hackney greyhound stadium will become a £100m multi-sport complex, hosting basketball, volleyball and handball in four separate arenas. After the games, one of these arenas will be taken down and rebuilt somewhere else in the UK.

The showpiece is the £255m, futuristic 80,000 all-seater stadium at Marshgate Lane, where the 2012 champions will be crowned. Heroes to match the greatest names of the Olympics – Emil Zatopek, Fanny Blankers-Coen, even Sebastian Coe – will be made here on a large strip of currently undeveloped wasteland, nestling uneasily, almost embarrassingly, on the fringes of one of the world's richest cities.

The transformation will begin soon. Work is already in progress just a fortnight after the games were somewhat surprisingly handed to London. Tessa Jowell has been appointed Olympics minister. Locog – the London Organising Committee for the Olympic Games – is being set up, with Lord Coe as chair and including many of the 'blazeratti' involved in getting the London bid off the ground. The government has published its Olympics Bill, which, by the time you read this, should have had two readings in Parliament. This will pave the way for the Olympic Delivery Authority, which will manage the public money that will be spent on getting the venues and infrastructure ready. Bidders for contracts to build the main arenas will soon be shortlisted, either later this month or in August, according to the London Development Agency.

The LDA has already invited 'expressions of interest' for various contracts and more than 200 leading companies have responded. Work on the 'undergrounding' of the vast number of overhead power cables in the Lower Lea Valley will soon begin. The tender for the design of the main Olympic stadium will be advertised in October. Planning permission has already been agreed by the five London boroughs affected – Newham, Hackney, Tower Hamlets, Greenwich and Waltham Forest – and compulsory purchase orders taken out on vast amounts of land and businesses within the Olympic zone.

In short, the London Olympics has hit the ground faster than a long-distance Kenyan runner. Organisers are keen to show that whatever the complaints of the unsuccessful French delegation, the International Olympic Committee made the right choice.

'I do believe we will deliver the best games,' says Dee Doocey, the London Assembly member in charge of the committee that will scrutinise all aspects of the bid. But she concedes that the committee will have to 'watch this like a hawk', adding: 'If things start to go wrong we must be in a position to turn it around'.

London appears to have won the bid on the strength of what it will leave behind after the athletes have gone home. Bid organisers tapped into a feeling among the IOC delegates that the whole experience has to be about more than a few weeks of games.

Anthony Vigor, a research fellow at the Institute for Public Policy Research, says: 'The lesson from Barcelona [host of the 1992 games] is that the Olympics is much more of an urban regeneration strategy. In other Olympics, it was more about build it and they will come. The London games are part of an urban regeneration project.'

This will lead to the transformation of the Lower Lea Valley, an area with some of the greatest deprivation in the country. An urban park and 9,000 new homes will be built – half of which will be affordable – and some 12,000 new permanent jobs created.

Transport in the area will also receive a major boost. By 2012, there are plans for railway lines serving the Olympic Park. If everything goes to plan, a train will pull into the station every 15 seconds. Up to 240,000 passengers an hour will travel to the games. An Olympic Javelin train, from central London to Stratford International, will take just seven minutes. A £250m order has been placed for the trains. The East London Tube line will be extended, and contracts worth £500m have already been announced. A seventh carriage will be added to Jubilee line trains. The new Channel Tunnel Rail Link will open in May 2007.

There will also be dedicated road lanes for the Olympics. In all, some £17bn will be invested in transport between now and 2012. The games have also accelerated existing major projects, such as the £1.25bn East London Line to Crystal Palace. However, the £10bn Crossrail Link, which will join east and west London, will not be ready in time.

There should be wider benefits, too, particularly from increased tourism across the UK. Organisers expect international spectators to head off around the country after taking in some sport. All host cities in recent times have experienced an increase in tourism, from a 22% rise in Atlanta in 1996 to 65% in Seoul in 1988.

And the legacy of sporting facilities is expected to be vast, not only for the world-class athletes but also eventually for the local community. For Jo Valentine, chief executive of business group London First, the games can help speed up a process needed anyway due to population pressures in the capital. London's head count will increase by 800,000 in the next 15 years.

'We have to develop eastwards to accommodate that number of people,' she says. 'This is a wonderful chance to get the basic infrastructure of transport, health and housing in place.'

It is possible that an urban regeneration company will be set up specifically for the games. And the Olympics is the best chance to achieve those regeneration goals, says Vigor. 'The Olympics refreshes parts other things do not reach. It generates interest unlike any other schemes. It is all about using it to deliver priorities in different ways,' he says.

You do not have to look as far afield as Barcelona to see how regeneration can be pushed through sport. The 2002 Commonwealth Games in Manchester transformed the eastern part of the city. Sean McGonigle, a New Deal for Communities co-ordinator at Manchester City Council, says £600m of public investment has been brought into that part of the city because of the games. Some 6,300 full-time jobs have been created; there have been 300,000 extra visitors. Unemployment has fallen from 12.8% in 1999 to 6.8% today. Forty per cent of residents wanted to move out of the area six years ago; today it is 26%. Domestic burglary has fallen by 42.5% and vehicle crime by 39.5% on the back of the regeneration.

'London would not have an Olympics if Manchester had not had a successful Commonwealth Games,' says McGonigle. The London bid looks set to learn on the ground from its Manchester counterparts as well. New Deal teams from West Ham and Plaistow are due to visit the Northwest soon to see what they can find out.

However, big projects would not be big projects unless there were some potential pitfalls. Worries over ticket touts and contamination of the ground that has to be developed have emerged, and Doocey admits there are already 'concerns' about the bureaucracy that is being created to oversee the Olympics. Locog, the ODA, the Department for Culture, Media and Sport, the London Assembly, the mayor, the Office of the Deputy Prime Minister, Transport for London, the London Development Agency, the prime minister, housing ministers, transport ministers, a possible regeneration company and even a Cabinet committee could all line up from the public sector side, even before myriad private sector providers have been chosen.

The whole process could become as absurdly complex and impenetrable as the way the Olympics' gymnastics event is marked. Doocey also wants local businesses to be rewarded in the bidding process, not just the multinationals. 'My concern is that the contracts are not awarded just to the large companies. The idea is that Londoners make money out of [the games].'

The issue of security, always central to the bid, was made even more important by the events in London on July 7. The DCMS says the bill stands at £173m and 'security will obviously be a highly important part of delivering a successful Olympics'.

In Athens, admittedly the first games since the September 2001 attacks on the US, security costs almost reached £1bn. Privately, officials say security here is well ahead of that in Greece and so much of the money spent in Athens was 'catching-up' money. However, there remains a large gap between the two games on security spending, which might narrow in the seven years ahead.

The final bill for the games might not be set in stone either. The £3.8bn figure consists of £2.3bn garnered from taxpayers and the National Lottery and £1.5bn for the funding of Locog. However, it does not take into account money that has to be spent on transport, infrastructure and any cost overruns.

Talk about Olympics budgets and organisers tend to go white around the gills at the very first mention of Montreal. The 1976 Olympics in Canada went down in history as the perfect example of how not to run a global sporting event. The 'Billion Dollar Games' are still felt almost 30 years on, as is the cost to the Montreal taxpayer. Originally budgeted to cost $310m (£129m), it ended up closer to $1.5bn (£600m), coming in five times over budget and 21 years – really – behind schedule.

By the time building work finished, Moscow and Los Angeles had hosted their Olympics and Seoul's was just a year away. Left with an enormous debt, the Canadian authorities came up with some big ideas to get back in the black – they raised taxes and used their lottery to try to clear the books.

But it is not just Montreal. Calgary, Albertville, Lillehammer and Nagano have recorded losses and attracted plenty of criticism. Sheffield's disastrous 1991 World Student Games, which chalked up a loss of £15m, also join the list of shame.

Gareth Thomas, Labour MP for Harrow West and a long-standing backer of the London games, says: 'The International Olympic Committee has got a lot better in the last ten years at making sure they have got real confidence in the capacity of cities to deliver. I think we can be reasonably confident that the bid team following it through will deliver on what they have promised.' It is possible, given that Olympic costs are generally shrouded in secrecy, that we might never know the final cost. But at least we will have a nation of fitness fanatics when the games take place, won't we?

One of the big claims of the London bid is that it will leave a major sporting legacy both in the stadiums that are left – some are temporary – and the fact that the event itself will prompt millions of couch potatoes to take up sport. Organisers are confident they can defeat 'Wimbledon Syndrome', when it is annually impossible to book a tennis court for a fortnight in the UK but incredibly easy for the other 50 weeks of the year. But is there really any proof that watching a major sports event can lead to a drastic change in culture among viewers?

Apparently not. Vigor admits there is 'no real evidence.' An intriguing study into the sporting impact of the Sydney Olympics shows that, although participation increased in seven sports immediately after the games, it declined in nine. The reason? Many people had become so used to watching sports on TV during the Olympics, they lost the urge to get up off the couch and try a game themselves.

PFjul2005

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