A leading risk expert has claimed predictions on the impact of the Olympics on local construction are "complacent".

Gerard Orman, founder of Orman Risk Analysts has prepared a report for the Highways Agency on the risks inherent in its upcoming M25 road-widening project. He has said major QSs who predicted small additions to tender prices as a result of the 2012 work were off the mark.

Firms such as Davis Langdon and EC Harris have claimed that Olympics work will add between 1-2% to local construction inflation when the main work starts. Orman said: "I was quite surprised reading the commentaries from the big QSs. They have all been complacent about the Olympics.

"A lot of people claim that the work is a drop in the ocean in terms of the overall workload but I say look at all the transport projects, such as the East London Line, the Dockland Light Railway extension and Crossrail. There is a lot else going on."

Orman also pointed to the major demand for office space in the next decade with 214,000 extra jobs needed in the City of London by 2014. He said: "There are planning permissions for 60 buildings in the City at present.

"That's a considerable chunk of construction expenditure."

Orman said he had not come up with specific figures in his report.

He says: "You can't be too precise but the basic scenario is one that people should not be complacent about.

"The problem I identified was contractors were pricing (the M25) at a time of maximum instability in the market."

Source

QS News