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Olympic Village funding came from contingency

The Olympic Delivery Authority has admitted it was allocated £95 million of the London 2012 contingency fund to allow building work on the Olympic Village to begin.

Piling work on the £1 billion project at the Olympic Park in Stratford, East London started in June.

At the time the ODA said it funded the start of the project itself, but did not reveal that the £95 million came from the Games’ £2.2 billion contingency fund.

It was also forced to reduce the homes at the village from 4,200 to 3,000.

Main contractor Bovis Lend Lease was expected to raise half the overall amount through banks, with the ODA providing the other half.

However, since the tightening of the global financial markets Lend Lease has been unable to secure debt at sufficiently low levels to make the project financially viable without public sector subsidy.

ODA chairman John Armitt admitted that the Government could be liable for the entire £1 billion necessary for the project to go ahead if the current economic situation does not improve.

Mr Armitt said private finance was available six months ago, but that the amount available since then has steadily reduced to the point where now it is virtually unavailable.

An ODA spokesman said: “Discussions on long term funding arrangements are continuing in what is clearly a very difficult economic environment.”

A meeting of the Funder’s Committee was scheduled to take place yesterday but was postponed due to the absence of the Chancellor.

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