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London Olympics price tag balloons to $18 billion

LONDON -- The overall cost of staging the 2012 London
Olympics will be more than $18 billion, three times the original
estimate.

Olympics Minister Tessa Jowell made the announcement in
Parliament on Thursday after months of media reports of soaring
costs. The costs of construction, regeneration, security and
contingency funds have led to the soaring bill.

"The London Olympics will change Britain for the better,
forever," she said. "These Olympic Games will create a legacy in
one of the very poorest parts of the country, and we celebrate
that."

The total includes $10.3 billion for construction of venues and
the main Olympic park, including a $968 million contingency; $4.2
billion in a separate contingency; $1.1 billion for security; $1.6
million in value added tax; and $755 million for the Paralympics
and local sports programs.

The original overall estimate during London's bid was about $5.9
billion, including both public and private funding. Long-term
redevelopment of a 500-acre site in Stratford, east London, is at
the main Olympic project.

Thursday's figures are separate from the Olympic organizing
committee's budget of $3.8 billion for the operational costs of
running the Games.

Opposition lawmakers accused the government of financial
mismanagement and "raiding" the national lottery to pay for the
games, while others welcomed the announcement and said it finally
put the uncertainty over the budget to rest.

"The government's announcement gives Londoners real certainty
about the costs of preparing for the Games," Mayor Ken Livingstone
said, adding there would be no new council tax increases or public
transport fare hikes to finance the Games.

Prime Minister Tony Blair, speaking before the figures were
announced, defended the government's planning.

"There is a lot of alarmist stuff about this," he said. "We
have an Olympic budget. At the end of the day, the thing to
remember is that the money we are investing in the Olympics is
money for the country."