Market meltdown hindering funding for London 2012

LONDON: The prolonged global financial turmoil is making it difficult for London organizers to secure private funding for key construction projects for the 2012 Olympics.

The meltdown in the money markets could lead to greater public financing being required to build the Olympic Village and broadcast and press center by utilizing the British government's contingency of 968 million pounds ($1.9 million; euro1.2 billion).

``We originally expected to have quite big sums of private sector funding for the Olympic Village and for the media center,'' Olympic Development Authority chairman John Armitt said. ``The consequence of what is happening in the markets means that the availability of funding is more difficult. That is not to say that it is not available but, if it is available, it is available on harsh terms.''

The ODA is locked in talks with banks, a construction consortium and Lend Lease, the $2 billion village's Australian contractor.

``Negotiations are going on with banks and we will reach a conclusion,'' Armitt said. ``In reaching that conclusion there will be an element of contingency funding required.''

The ODA had hoped to raise around $900 million from the private sector for the village, which has already been scaled back to 3,300 apartments for the 17,000 athletes and coaches.

Armitt insisted that the overall project is on schedule and within the 9.3 billion pound ($17 billion, euro12 billion) budget.

The athletes' village is the biggest component of the 500-acre Olympic Park in east London. Construction work started in June.