The Olympic Delivery Authority (ODA) has entered into an agreement for Qatari Diar Athletes Village UK Ltd (QDD) to purchase 1,439 homes and associated ground floor retail units in the Olympic village development, together with six adjacent future development plots having the potential for a further 2,000 new homes in the public realm, which benefits both the Olympic village and the development plots. As Minister for the Olympics and an authorised signatory for the Secretary of State for Culture, Olympics, Media and Sport, I have signed a guarantee given in support of this agreement.
QDD is a wholly owned subsidiary of QDD Ltd, a joint venture between DV4 Ltd, a real estate investment fund advised by Delancey (a specialist real estate investment company with a property portfolio across the UK) and Qatari Diar Real Estate Investment Company (a real estate investor and developer owned wholly by the Qatar Investment Authority).
The agreement is between QDD and the Olympic Delivery Authority (ODA) for the sale of SVDP Ltd, a wholly owned subsidiary of the ODA which holds the ODA’s interest in the village (and associated development plots and public realm) on its behalf.
The ODA has provided various undertakings, indemnities and warranties under the terms of the agreement with QDD. In essence, these oblige the ODA to build and convert the village units from athletes’ use at games time to private housing and deliver wider Olympic park infrastructure. The ODA has no significant sources of funding other than the public sector funding package and is expected to have a limited life span that many of the 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’s obligations. Such a guarantee is provided for under the London Olympic Games and Paralympic Games Act 2006.
All of the ODA’s obligations to QDD are within the ODA’s existing scope and budget therefore no additional funding is required to meet these obligations. However if, due to unforeseen circumstances, additional funding is required there is access to ODA programme contingency, and if that was exhausted, to the public sector funding package contingency for the Olympic programme as a whole.
The obligations do not constitute additional contingent liabilities because the obligations covered by the guarantee can be funded within the overall public sector funding package for which a contingent liability was announced to Parliament in March 2007.
The coverage of this guarantee is very similar to that provided in 2009 in support of the agreements entered into by the ODA with Triathlon Homes LLP for the purchase of 1,379 affordable homes on the Olympic village development. Parliament was informed of the Triathlon guarantee by the then Minister for the Olympics the right hon. Member for Dulwich and West Norwood (Tessa Jowell) on 22 June 2009, Official Report, columns 47-48WS).
At the point at which the ODA is wound up, any subsisting rights and obligations under the agreements with QDD will be managed and considered as part of the Government’s decision at the time on the allocation of the ODA’s remaining assets, rights and liabilities.