AMA
Research has recently published the 3rd Edition of its overview of the
Olympic Games Construction and Refurbishment market in the UK. This
significantly updates the previous edition published in July 2006 and
provides an overview of the current status of the planned construction and
repair, maintenance & improvement projects for the delivery of the 2012
Olympics in London.
In
the previous 12 months since AMA published its 2006 Olympic Construction
Update, there has been considerable progress in the development of the
Olympic Park and supporting infrastructure. In particular, there have been
three significant developments: a new planning application was
submitted in February 2007, one of the biggest in European history; the
revised Olympics budget was announced by the Government in March 2007 and
the ODA has chosen its principal delivery partner to oversee developments on
the Olympic Park. Furthermore, the ODA has now begun to tender for
the design and construction of a number of 2012 venues, which has finally
opened up competition for the estimated 2,000 contracts to be let over
period up to 2012.
The
ODA announced its Olympic Park Delivery Programme on 25 July 2006, outlining
the key timelines it intends
for planning, design, construction and testing.
The overall timescale for the ODA’s main construction activity on the
Olympic Park and other non-Olympic Park venues is outlined in the table
below:
The ODA has, so far, spent two years
acquiring all the necessary land, preparing project plans, and getting them
approved gaining full possession of the Olympic Park site in July 2007 when
it will start a demolition programme which will take nine months, levelling
some 256 buildings.
Around 93% of the land needed on the
Olympic Park site is now in public control and demolition and clearance
work has now begun. The ODA aims to clear most of the land in east
London by the time the Beijing Olympics are staged in 2008. Around one fifth
of the Olympic Park has now been cleared, with demolition work on other
parts of the site continuing. The first major earthworks and remediation
work has begun in many parts of the site and following extensive work to
relocate businesses and residents and secure the Olympic Park site,
demolition work will now accelerate as the ODA takes vacant possession of
the site.
With the Olympic Village site already
cleared, work has begun to divert the overhead power-lines through the area
allowing construction work to start early next year, a year earlier than
planned.
A strong start has also been made on plans
for the 'big 4' Olympic venues - detailed planning and design work on
the Olympic Stadium is making good progress with designs set to be revealed
later this year; a selected designer for the VeloPark has just been
announced; a shortlist of companies has been announced for the contract to
construct the Aquatics Centre and a shortlist of companies has been
announced to develop the Olympic Park media centre (IBC/MPC) for the Games
and in legacy.
The draft Olympic Transport Plan
was published at the end of 2006, and following extensive consultation, the
full Transport Plan will be published later in 2007. The ODA has also
announced its funding of the £104 million scheme to upgrade Stratford
Regional Station – a key gateway to the Olympic Park and expects to secure
planning permission enabling work to start on site early in 2008.
The Docklands Light Railway (DLR)
system is also undergoing continuing expansion, with the extension of the
London City Airport branch from to Woolwich Arsenal currently under
construction and is due to be completed in February 2009.
One of the most significant developments for
the construction industry has been the launch of the ODA’s e-tendering
service for the procurement of construction
contracts announced in
February 2007, which will
help businesses compete for up to 2,000 Games contracts. The
service enables construction firms and interested parties to view current
and advance notice of future contract opportunities
ranging
from work designing sports venues and landscaping to providing occupational
health services and logistical support to construction projects. The service
will enable businesses to identify major 'Tier one' contracts, which are
signed directly with the ODA and are likely to be significant in size, ahead
of tender competitions and take part in the tender process online.
Already in 2007 a
number of major contracts for 2012 venues have been advertised in this way.
A number of key Olympic contracts are
currently out to tender including utilities services across the Olympic
Park; the construction of structures, roads and bridges to create an open
and accessible Park; and the first design contracts for temporary venues for
the 2012 Games.
There has also been progress on the Games'
environmental impact, with the publication of a sustainability strategy
detailing proposed green standards for the Olympics and focusing
on low carbon, low waste, green
transportation and high reuse of materials during construction.
Perhaps the most controversial development
surrounding the 2012 Games in the past 12 months has been the announcement
by the Government that the final estimated budget had more than
trebled from £2.4 billion estimated in the original bid to £9.35 billion.
At the time of London’s 2012 bid as
outlined in the Candidature File, whole
categories of costs were omitted, including tax, contingency margin and
security. The original budget had used the costs of an urban development
corporation as a benchmark for the Olympic Delivery Authority’s running
costs, with the result that these costs had been seriously underestimated.
With the bulk of construction work on 2012
venues yet to begin on site, it is still too early to assess the full
impact of the 2012 Olympics on the
UK construction industry.
However, the bulk of Olympic construction expenditure is likely to occur
within the period 2008-2011, with workload generated by the 2012 Games
expected to add around 1.5% output to all new build construction output over
the period 2007-2012. An extra 2% in all types of construction work (12% of
activity in London) is expected to be generated over the 5-year period
2007-2012, which equates to between £2 and £3 billion to output values in
the same period.
At this stage, it is
difficult to predict the precise impact that the Olympics are likely to have
on output and therefore forecasts are only approximate. An increase in
output of around 2.8% is expected in 2007 as preparation and infrastructure
works continues on a number of venues, with the bulk of Olympic construction
expenditure likely to occur within the period 2008-2011. Olympic workload is
expected to peak in 2010 with increases of around 9% in output. The
sustained increase in output is expected to slow slightly in 2011 as many
venues are completed ahead of the Games, and forecast to rise again in 2012
as the Legacy construction phase begins and when many permanent works are
reconfigured to provide post-games facilities.
