Credit crunch to cause more cost overruns for the hapless London Olympics

The credit crunch will cause delays and yet more cost overruns for the beleaguered £9.3 billion London Olympic Games project.

The £9.3 billion was never expected to pay for the whole thing. A whole array of companies were expected to borrow money from others to build some of the project with the hope of getting the money back to pay off the loans when chunks of the project were flogged off after the 2012.

But the banks are not as stupid now as they were before. Negotiations to pay for the Olympic village are running into problems because of banks' reluctance to make new loans.

One bit of the project that could get stymied is 3,300 flats that are planned to built to house the athletes.

Funding should have been agreed by now but it has not been. The Olympic Delivery Authority is putting up half the cost. The remainder was to be borrowed through Lend Lease, an Australian outfit that won the contract to build the village.

Watch this space.