Olympics 2012: Government Says Cost of London Games Came in $604 Million Under Budget

London Olympics Logo NEW - P 2012

London Olympics Logo NEW - P 2012

British officials cite cost savings for spending on security, transport and construction.

LONDON -- The U.K. government said Tuesday that the cost of the London 2012 Summer Olympics and Paralympics will wind up $604 million below expectations.

The combined budget target for the two events previously stood at $14.88 billion, but officials had signaled the final costs could be more favorable. The latest cost projection stands at $14.3 billion, officials said.

The savings were found in lower spending for security, transport and construction for what was called the U.K.'s "golden summer of sport."

Another $165 million from a contingency fund also went unspent, meaning a total of $769 million still remains from the original budget. The government said the unspent contingency cash will cover "risks" linked to the revamping of the Olympic Park.

Sports Minister Hugh Robertson said Tuesday, "London 2012 was a tremendous success, and it is a significant achievement to deliver this large and complex program on time and under budget."

Robertson also said the government has confirmed that the London Organizing Committee of the Olympic and Paralympic Games (Locog), set up as a public company, took "around" $1.6 billion to stage the games.

Locog reported that the cash primarily was pumped into paying fees for contractors, particularly fees for security services. Locog is expected to publish its full budget in March. Said Robertson, "At present, the expectation is that it will break even."

The Tuesday figures were published in the government's final quarterly economic report.

With some London 2012 contracts still winding down, officials have described the latest projections as a "prudent" estimate.

The budget set in 2007 was almost four times the estimated cost at the time London bid for the Summer Games in 2005. It was revised upward after taking into account previously overlooked costs such as local consumer taxes, increased security spending and an expanded plan to regenerate the main Olympics site in East London.