Wembley Back in the Running As Credit Crunch Hits Olympics

The organisers of the 2012 Olympic Games are set to scrap plans to build a new combined venue for the badminton, rhythmic gymnastics and paralympic volleyball in an effort to save £40m as their £9.3bn budget continues to be put under pressure because of the credit crunch.

The London 2012 Organizing Committee had planned to build a temporary, 6,000-seat arena in north Greenwich, close to the O2 center which is hosting the Olympic basketball finals. But a report from its accounting consultants, KPMG, which was discussed by the Olympic board yesterday, has recommended the events be relocated to an existing venue.

"The draft conclusion of the KPMG report is that there ought to be an economic opportunity to shift [the venue], so over the next few months we will look at ways to shift that," the committee's chief executive, Paul Deighton, told the London Assembly. The favored alternative location for the three sports is Wembley Arena, which hosted the All-England badminton championships between 1957 and 1993.

The arena, in north-west London, had not been considered a convenient venue to host events for the 2012 Games because it was too far from the athletes' village, which is under construction in Stratford on the other side of the city. This was the main reason given by organizers for not using the arena's neighboring Wembley Stadium as the main track and field venue instead of building a new £496m stadium in the Olympic Park in the Lower Lea Valley. The stadium is to be used for the Games' football finals instead.

The KPMG review was commissioned by the Olympic Delivery Authority in August. It has also recommended that the 12,000-seat, £60m temporary arena for basketball should be built in the main Olympic Park as originally planned. Consideration was given to finding another home to save money but Deighton said it "did not make economic sense" to relocate the event to an alternative site.

The cost of venue hire and the loss of ticketing revenue caused by reduced capacity were key factors, the organizing committee said last night. The decision comes amid mounting financial pressure on the committee after private investment fell away this autumn owing to the global economic downturn.

A delegation from the International Olympic Committee, headed by the president, Jacques Rogge, arrives in London next week to discuss with organizers the lessons learned from the Beijing Games in August. The government has already had to authorize a £95m bail-out from a £1bn contingency fund to keep building work going on the London Olympic Village after private finance deals for the development collapsed because of the credit crunch.

The cash will be used to construct 3,000 apartments for athletes at the Olympic Park site while organisers continue to discuss the prospect of the government taking on the full £1bn cost of the project which was to have been met by developers and banks. Negotiations are continuing and a deal is unlikely to be made public until the new year.

It was also decided that the equestrian events will remain at Greenwich Park as planned with none of the alternative sites identified by the organisers close enough to accommodate the modern pentathlon, which needs to be held near the Olympic Park to allow the completion of all five events within one day.

Plans to locate the shooting at the Royal Artillery Barracks in Woolwich remain under review. A draft for a temporary, 7,500-seat shooting arena at the barracks has been drawn up, with the facility to be dismantled after the Games and potentially relocated elsewhere in the UK.