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London Beats Favorite Paris to Stage 2012 Summer Olympic Games
July 6 (Bloomberg) -- London won the vote to stage the 2012 Summer Olympic Games, snatching the prize from the favorite Paris to become the first city to host the event three times.

The U.K. capital, which promised the largest budget of the five competing cities, won on the fourth ballot at the International Olympic Committee's meeting in Singapore's Raffles City Convention Centre today. The odds halved on London's bid this week after lobbying by U.K. Prime Minister Tony Blair. New York, Madrid and Moscow were eliminated in earlier voting.

London's victory will spark spending of $15.8 billion and revive the east of the city where most Olympic venues will be built, organizers say. For Paris, the decision marks its third failure in 20 years to win over IOC voters and is a setback for President Jacques Chirac, who lost regional elections last year and a May 29 referendum on the European constitution.

``East London was the backyard for generations and this Olympic bid is in part going to change that,'' Tony Travers, a political analyst at the London School of Economics, said in a July 4 interview. ``That's the great strength of the bid.''

The result is a triumph for Sebastian Coe, who took over the bid chairmanship from former Go Fly Ltd. head Barbara Cassani in May 2004. At the time, the IOC criticized London's transportation system as ``obsolete'' and praised Paris's rail system as ``one of the most comprehensive in the world.''

Economic Benefit

The vote follows a political tussle between Chirac and Blair. Blair is seeking to cut European Union subsidies to French farmers, while Chirac wants to end Britain's EU rebate. Liberation newspaper on July 4 reported Chirac as saying ``mad cow'' was the U.K.'s biggest contribution to farming and ``you can't trust people who cook as badly as'' the British. The two leaders meet this week at the Group of Eight summit in Gleneagles, Scotland.

London's campaign was boosted by the presence in Singapore of Blair, England soccer captain David Beckham, who grew up in east London, and five-time rowing gold medalist Steve Redgrave.

The result may buoy the U.K. economy, Europe's second- largest, which is losing momentum as consumer spending slows and manufacturing contracts. The area around the proposed Olympic Park will have 9,000 new homes and about 11,000 new jobs, the London Development Agency said. London Mayor Ken Livingstone expects the event to attract investment of $9 billion to the city.

``The economic benefits are profound,'' Coe, a two-time Olympic champion at 1,500 meters, said in a July 4 interview. The Sydney Games of 2000 ``manifested itself in full-time jobs, in tourism, in domestic and international contracts, in regeneration.''

Olympic Park Investment

The U.K. government said last year it would invest 7 billion pounds ($12.3 billion) in the city's transport network while Livingstone pledged another 3 billion pounds. Of the $2.1 billion London plans to spend directly on the Games, $700 million will go on sports venues, $800 million on the Olympic Park and $600 million on roads and railways.

While Paris's proposed Olympic stadium, the Stade de France, was built for soccer's 1998 World Cup, London is still acquiring land for its Olympic Park, the centerpiece of which will be an 80,000-seat arena. The city plans to use several existing landmarks to stage events.

Horse Guards Parade, near Blair's Downing Street residence, will host beach volleyball; the Greenwich Dome will stage gymnastics, and archery will take place at Lord's cricket ground.

London contributes about 166 billion pounds a year to the U.K.'s 1 trillion-pound economy, according to the London Chamber of Commerce. Tourism hauls in 9.4 billion pounds a year and employs 500,000 in the city of more than 7 million people, over 10 percent of the national population.

Blair and Beckham

Almost 50 percent of London-based companies expect their business would benefit from staging the Games, the first in the capital since 1948, according to a Chamber of Commerce survey of 357 companies in the fourth quarter last year.

Still, Greece has said the Olympics last year cost 7.2 billion euros, 56 percent more than the initial budget, due in part to construction delays and security. The Greek government is selling venues to recoup some of the costs.

London's previous experience as the Olympic host came by default. Rome was originally selected to host the 1908 Games but withdrew its candidacy following the eruption of Mount Vesuvius two years earlier. London again stepped in for the 1948 Games, the first since World War II.

The city was backed by 35 IOC members, compared with 50 for Paris, according a June 7 report in the Guardian. Culture Secretary Tessa Jowell has visited 14 countries since May 26.

Wembley Construction

Coe and his team managed to sway IOC members concerned at a poor record in staging events and constructing venues. The city in 2001 reneged on an agreement to stage the 2005 World Athletics Championships after the government ruled that a proposed venue in the city's northeast was unfeasible. A new Wembley stadium will open next year, late and over budget.

The city was forced in April to withdraw incentives for athletes and National Olympic Committees. The sweeteners included flights and a pledge of $50,000 to each NOC. IOC president Jacques Rogge said the offer risked breaking guidelines.

The London Games will take place July 27 to Aug. 12, 2012.

Last Updated: July 6, 2005 07:50 EDT

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