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Bill for London Games Soars by $1.7B

LONDON-Construction inflation already has had its evil way with the cost of building London's Olympic Stadium. And the escalation isn't done yet.

By Anita Howarth | Updated on November 22, 2006

LONDON-The cost of the 2012 Olympic Games has soared by 40%–or euro 1.3 billion ($1.7 billion)–to euro 4.9 billion ($6.3 billion). Culture Secretary Tessa Jowell says that the increased costs were due in part to rising costs of commodities like steel, which had doubled in price, and revised transport costs.

Construction inflation is expected to run at 6.5% a year until 2012 primarily because massive development in the Middle East and China has led to a relative shortage of supply in building materials. But Jowell warns that costs could rise further still. The current euro 4.9-billion ($6.3-billion) cost does not include regeneration. The land set aside for the development is heavily contaminated and government advisers put increased costs of disposing toxic waste at euro 118.5 million ($152.6 million).

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