Will we be setting a new record?

CHRIS FISHER, EDP Political Editor Joy in London about winning the 2012 Olympics quickly turned to horror and despair in the summer of last year. The very next day the capital city was hit by the '7/7' Tube and bus bombs.

CHRIS FISHER, EDP Political Editor

Joy in London about winning the 2012 Olympics quickly turned to horror and despair in the summer of last year. The very next day the capital city was hit by the '7/7' Tube and bus bombs.

It was still wonderful to win the games though, wasn't it? And not just because victory for London meant defeat for cocky Paris. It would be brilliant to have such an exhibition of sporting excellence in our own country. It had to be a vote of confidence in Britain and London. And having the heart of the event in the East End at Stratford would ensure massive regeneration of a long neglected part of the city that has largely missed out on the influx of wealth witnessed in the London Docklands.

Dissenting voices have been getting louder, however, as the estimated cost of the games soars. The original estimate from the government was £2.4bn, but Tory shadow culture minister Hugo Swire is asserting that this budget was written “on the back of a fag packet”. And the Conservative chairman of the London Assembly, Brian Coleman, is making similarly acerbic comments. Noting that the predicted costs have already officially risen to about £5bn - the £3.3bn figure now being given by culture secretary Tessa Jowell excludes some major items - he is voicing anxiety that the final bill will be £10bn and even £20bn.

Fewer than 18 months since the choice of London as the 2012 venue, the costs are jumping in deeply ominous fashion. Why? VAT looks like having to be paid on construction, though there was no provision for that in the budget presented to the International Olympic Committee. Security costs have risen rapidly. So has the expense of acquiring land for the games and regenerating the area where the Olympic Park will be constructed.

Answering questions in a Commons committee yesterday, Ms Jowell talked about a doubling of steel prices, and of having to raise transport costs to take account of inflation up to 2012. There was also a possibly oxymoronic reference to paying the construction consortium CLM an extra £400m to make sure the games came in on budget and on time.

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One has to wonder in the circumstances whether the figure presented to the IOC before the venue decision was unrealistically low. If so, shouldn't the IOC have spotted it?

Eyebrows are being raised in the Treasury. And there is conjecture that the already much delayed London Crossrail scheme, which would allow high-speed rail services in tunnels between Liverpool Street and Paddington (and through the centre of London), could be a casualty. The Treasury is said to be warning that more public money for the Olympics will mean less for Crossrail.

The £16bn rail project - another estimate liable to ongoing revision - would do much generally to improve the seriously creaking transport infrastructure in London. It would also help greatly to get people to and from Stratford for the games. So it is a pity that awarding them to London was not made conditional upon the prior completion of Crossrail.

As it wasn't, Gordon Brown can think in terms of shifting money from rail track to running track without infuriating the IOC, and probably also without damaging his objectives of becoming prime minister and then winning a general election. But it will be rather crass - and rather typical of the muddled way we do infrastructure in this country - if one big project boosting the East End is pushed through at the expense of another.

Ms Jowell maintained yesterday that the Olympics project is under control. But just how long will it be before that assertion looks very silly? The fact that costs are ballooning already is, or should be, very worrying. And the minister's statements are providing little reassurance.

How will the surging bills be paid? Discussions about that are taking place inside the government, said Ms Jowell. What does that mean? The answer, one suspects, has to contain bad news for council tax payers in London, and also for many organisations hoping to benefit from Lottery handouts.

Major infrastructure projects can be constructed on time and according to budget in this country. One good thing to be said for Heathrow Terminal 5 is that the construction finished early and under-budget. The rebuilding of Ascot racecourse was done on time. But on the other hand there is the saga of the new Wembley Stadium. The final figure looks like being close to £800m - about four times the cost of the Millennium Stadium in Cardiff. Why?

Will the Olympics construction be another Wembley? Can we set a new Olympic record for cost escalation? After the early laps it's starting to look like it.