London 2012 Olympic chiefs have said that they are facing a £250 million shortfall in funding for the athletes village as a result of the economic crisis.
Work on the Olympic Village has already begun, but Reuters reports that developer Land Lease is struggling to secure bank loans.
Olympic Delivery Authority (ODA) chairman, John Armitt, told members of the London Assembly: "We are in line with budgets, but there are factors that we can't control and one example of that is what is happening in the city with the credit crunch. The village and broadcast centre were planned in one economic environment and are having to be delivered in another. The credit crunch is hitting the Olympics hard, but we remain resilient, we are taking the necessary steps to protect delivery and keep the use of contingency to a minimum."
A £2 billion contingency fund is included within the 9.3 billion-pound budget for building the Games venues and redeveloping the Olympic Park in east London. Armitt told the BBC that finance was in place for everything for except elements of the Village and broadcast centre, but that the shortfall was expected to be between £200 and £250 million. "We will continue to negotiate and see where we get to at the end of the day, but it will take a while before we reach a conclusion," he said.
Armitt said delaying the start of the Village was not an option. “If we had waited for the financial agreements to be signed then completion of the project in time would have been in significant jeopardy," he said.
