Examination of Witnesses (Questions 200
- 219)
TUESDAY 4 DECEMBER 2007
LORD COE,
MR PAUL
DEIGHTON, MR
JOHN ARMITT
AND MR
DAVID HIGGINS
Q200 Paul Farrelly:
What is the multiplier that you use for inflation?
Mr Armitt: About 6% per annum.
Q201 Paul Farrelly:
And with that we can get part of the way there—
Mr Armitt: You get pretty well
the whole way.
Q202 Paul Farrelly:
One of the things that you said in front of the London Assembly
was that actually one element of the increased costs was actually
the cost of conversion into legacy mode. Lots of us around the
country have bitten our lips while the good causes have been raided
and new swimming pools cannot go ahead because of the raid on
the Lottery, but we have bitten our lip for the regeneration of
London and the national pride of having the Games because there
was going to be a legacy there. But now we are being told that
actually we have to pay extra for that legacy.
Mr Armitt: No, the 496 includes
the conversion from 80,000 to 25,000.
Q203 Paul Farrelly:
But the cost was not included in the original—
Mr Armitt: Whether it was included
in the 280 or not I do not know but it is certainly included in
the 496.
Q204 Paul Farrelly:
But we are being told that the cost is extra now for legacy conversion,
effectively.
Mr Armitt: No, it is not. No.
Clearly the cost of converting something there is a cost and that
cost will be borne in 2013 when that conversion is happening.
But we have included money in the Stadium cost to convert it down
from 80,000 to 25,000.
Q205 Paul Farrelly:
How much is that?
Mr Armitt: My recollection is
it is about 25 million.
Q206 Paul Farrelly:
I will labour the point. We had thought that the legacy cost would
be in there in the planning in the bid in the first place. It
is rather like the rest of the country being spun around the Olympic
rings and while we are still dizzy we are being bashed over the
head by the Olympic hammer because we are paying extra money on
top of what we thought we were paying.
Mr Armitt: I am not quite sure
how to answer that but I would make the point that what is happening
here is that there is an enormous amount of the expenditure on
the Games which you can look at and say, "This is providing
a long term benefit." This was one of the most rundown parts
of London, an enormous site the size of Hyde Park, 500-600 acre
site, which is a very rundown part of London—a contaminated
area of high unemployment, etcetera etcetera. At the end of the
Games this site will have been rejuvenated into one which provides
a platform for major investment ongoing for the following 20 years.
You can look at what we are spending in infrastructure, decontamination,
putting the overhead cables underground, providing sporting facilities,
providing job opportunities through the IBC and providing a fantastic
central spine of parkland. The Lee Valley, the river will look
nothing like it looks today; it will be far, far better than it
is today. All of that is legacy and it is being provided through
the opportunity of the Games. So when I look at people complaining
about five billion, six billion that we are spending on the parkland,
nearly all of that money is there for the long term and it is
providing real legacy opportunity for the country and for every
company that has been involved in supplying it. Half of the suppliers
so far to us have come from around the country not from London,
and those businesses are building their business off the back
of being able to supply to the Olympic Games; they are obtaining
experience which will enable them to bid across the world for
future Olympic Games. So there is an enormous opportunity which
this is providing, which I am quite confident is being taken and
it will at the end of the day, I believe, be good value for money.
Q207 Paul Farrelly:
We do not want to begrudge East London anything but can I give
you a homily of my own? At 2004 prices the cost of the Media Centre
alone—2004 prices without an opposite estimate—is
ten times the annual budget for regeneration of North Staffordshire,
which has a population equivalent of three and a half London boroughs.
Mr Armitt: The Media Centre must
be one of the most complex buildings that is necessary as part
of broadcasting the Olympics to billions of people across the
world. It is probably the largest journalistic activity which
takes place across the world every four years. You do not provide
a building of that scale for 20,000 journalists without guaranteeing
that they are going to be able to do their jobs properly because
if they do not then we fail in showcasing Britain and in showcasing
the Olympics.
Lord Coe: And showcasing North
Staffordshire!
Q208 Paul Farrelly:
We understand that and it is important to get the accurate commentary
in North Staffordshire as well as Glasgow and anywhere else, but
you can understand that the Committee and a Parliament that represents
the nation and the regions because of the size of the sums involved
it is important for us to be accurately appraised of the costs
and how those preparations are going. Could we leave this Committee
today—we have a figure for the Stadium—with up to
date figures for the other four major centres, which I do not
think we have? That is the Velopark, the Aquatic Centre, the Media
Centre and the Olympic Village. Could you give us the four figures
for those as well as the figure that we already have for the Stadium.
Mr Armitt: No we cannot, for the
very reason that we are still in negotiation with the primary
commercial organisations to deliver those, and therefore the last
thing I would want to do is to talk about numbers when we are
in the middle of commercial negotiations. As we move forward so
we will be able to reveal the numbers and, as David has already
said, in the next two weeks more details will be announced by
the Department. We have undertaken to be transparent with the
progress that we make and as numbers are firmed up so we will
release them. But I do not think it is actually in Parliament's
interest to put those numbers in the public domain before those
numbers are ones from which we have the most commercial opportunity.
Q209 Paul Farrelly:
I fully understand that but do you have an anticipated date by
which all those numbers will be known?
Mr Armitt: They will be progressive
through the next 12 months because most of the major contracts
will be placed by that time.
Q210 Chairman:
Could I raise two specific issues with you very quickly? The first
is the Volleyball Arena, the Basketball Arena and the Fencing
Arena were intended to be temporary and you stress that they could
be relocated to other cities after the Games and that this would
be part of the sporting legacy in the regions. We are now told
that apparently these are no longer going to be temporary and
are going to be located in permanent venues. Can you update us
on whether that is correct?
Mr Armitt: Basketball is certainly
a temporary stadium; it is one which we are in the throes of developing
the designs for at the moment and the intention is that that is
a stadium which can be demounted and relocated in the future.
The Volleyball is Earls Court. Handball is a permanent stadia
and fencing is one which is being looked at at the moment.
Q211 Chairman:
So the report that basketball may be transferred to the Millennium
Dome, the O2 is incorrect?
Lord Coe: Those are the finals.
Mr Deighton: The finals were always
going to be played there.
Lord Coe: Can I just make the
broader point that our template going forward was where possible
to use existing facilities. During the bidding process it was
actually one of the most important concepts for us that we already
had 64% of those facilities in place. Where we could not make
a cogent case for usage going forward in any structured way we
wanted to deliver in temporary, and only where we could make that
case did we want to put something down that was permanent, but
we have always been very open to where permanent facilities become
available, particularly in our existing structures, where we might
be able to make the Games a better spectacle for athletes, the
presentation of those sports, spectator access, we have clearly
looked at that and that will be an ongoing process.
Q212 Chairman:
And the report specifically about fencing, that that is now going
to be transferred to the ExCel, is that correct?
Lord Coe: None of that thinking
has been finalised but as I make the point, if we are able to
look at existing facilities as venues that has to be a sensible
way of approaching things.
Q213 Chairman:
Although you will then lose the projected legacy use across the
regions?
Lord Coe: Yes, clearly all this
has to be in conjunction finally with IOC sign-off, discussions
with our governing bodies and all the legacy thinking. But that
is where we are at the moment and that is a process that should
be taking place.
Q214 Chairman:
Can I ask you on one other area, you will be aware that British
Shooting have said to us that they think that the proposed site
at Woolwich is not the best and that you would do better to move
shooting to a new facility at Dartford, which would provide legacy
use. Are you in discussion with British Shooting about this or
do you simply reject their suggestion?
Lord Coe: I will ask Paul Deighton
to take you through the detail but, no. We are of course in discussion
with British Shooting but we are very comfortable about the venue
that we have chosen; it has been signed off by the International
Federation and signed off by the International Olympic Committee
and we are discussing legacy and all the other things that you
would be doing. The template again, let us be very clear about
this, through the International Olympic Committee and through
our bidding process was to provide a compact Games. We were able
to go into that bidding process by saying that 80% of our athletes
were within 20 minutes' travel time and we wanted to bring sports
into the city that were accessible to new client groups, and that
was clearly part of the legacy and the participation programme
going forward.
Mr Deighton: Nothing has changed
since the host city contract was signed. When we originally made
the bid the shooting was sited in Bisley; we moved to Woolwich
because in order to win the Games we were required to have a more
compact Games and Woolwich would enable the athletes to stay in
the Olympic Village. At that time the IOC, the International Shooting
Federation and the national governing body all signed off on it
and nothing has changed, so we expect to move forward on that
basis.
Q215 Chairman:
They may have all signed off on it but British Shooting, which
is the governing body, has clearly not signed off.
Mr Deighton: No, they did sign
off but they had a change of Chairman.
Q216 Chairman:
They have changed their minds.
Mr Deighton: British Shooting
signed off on it; they have had a new Chairman who has revisited
it.
Q217 Chairman:
But you are not persuaded that you should revisit it.
Mr Deighton: We are staying.
Chairman: You are staying.
Q218 Philip Davies:
I was reading the paper a couple of weeks ago and Barry Hearn
seemed to be claiming that Leyton Orient would be playing at the
Olympic Stadium after the Games. Could you tell us where we are
with Leyton Orient?
Mr Higgins: There have been talks;
there is nothing finalised. Certainly they are an attractive tenant,
that is for sure.
Q219 Philip Davies:
Are they the most likely tenant?
Mr Higgins: They are one of the
tenants, including National Athletics and potentially Premiership
Football.[6]
Chairman: Can I thank you very much.
6 Note by Witness: Witness meant rugby Back
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