The Olympic Delivery Authority (ODA) has entered into agreements for Triathlon Homes LLP (Triathlon) to purchase 1,379 affordable homes on the Olympic village development. I have given a guarantee, as Minister for the Olympics, in support of those agreements.
Triathlon is a consortium of First Base and the registered social landlords Southern and East Thames. The principal agreements are between Triathlon, its debt funders and Stratford Village Development (GP) Limited (Stratford Village Development), a wholly owned subsidiary of the ODA which is developing the village on the ODA’s behalf.
As Stratford Village Development is a newly established company, with minimal financial strength, the ODA has guaranteed its obligations under the terms of those agreements and has also undertaken to Triathlon, and its debt funders, to perform certain obligations which fall directly on the ODA.
The ODA itself has no significant sources of funding independent of Government and is expected to have a limited life span that many of Stratford Village Development’s obligations are expected to exceed. In such circumstances, and given that the obligations go beyond the lifetime of the 2012 games, I have agreed to a ministerial guarantee of the ODA in support of its guarantees of Stratford Village Development and the ODA’s direct obligations. Such a guarantee is provided for under the London Olympic Games and Paralympic Games Act 2006.
The guarantee essentially covers the ODA contracting to build and convert the units from athletes’ use at games time to affordable housing specification and the ODA delivering its scope for the wider Olympic park infrastructure.
All Stratford Village Development’s and the ODA’s obligations to Triathlon and its funders are within the ODA’s existing scope and budget—therefore no additional funding is required. As with the rest of the ODA’s programme, there would be access to programme and funders’ contingency, if it became necessary, from within the existing public sector funding package.
The obligations do not constitute additional contingent liabilities because the obligations covered by the guarantees can be funded within the overall public sector funding package for which a contingent liability was announced to Parliament in March 2007.
At the point at which the ODA is wound up, any remaining rights and obligations under its guarantees and direct undertakings will be managed and considered as part of the Government’s decision at the time on the allocation of the ODA’s remaining assets and liabilities.