Bungled Games deal costs G4S £70m sterlingTuesday 12 February 2013 15.38
Security company G4S is to take a bigger than expected £70m hit on its bungled contract for the 2012 Olympics and Paralympics in London.
The loss, which compares with its previous estimate of £50m, follows months of negotiations with Games organisers Locog.
The group also incurred additional costs of around £18m relating to charitable donations, fees and the cost of sponsorship and marketing.
''The UK Government is an important customer for the group and we felt that it was in all of our interests to bring this matter to a close in an equitable and professional manner without the need for lengthy legal proceedings,'' the company's chief executive Nick Buckles said.
The two sides have been in talks over a final settlement for the £240m security contract, after G4S failed to provide all of its 10,400 contracted guards.
The shortfall left the British government with no choice but to step in with military personnel.
Two G4S directors resigned in the wake of an independent review into the company's botched London Olympics contract, when the group only fulfilled 83% of contracted shifts.
Chief operating officer David Taylor-Smith and Ian Horseman Sewell, who was head of global events, carried the can for the fiasco, but Mr Buckles stayed in his post.
Locog said the UK taxpayer's interests have been fully protected in compensating for the difficulties experienced by G4S's shortcomings.
Its chief financial officer Neil Wood said the overall agreement reduced the payment due to G4S by £85m, comprising £48m to cover step-in costs by police and military and £37m primarily for project management failures.
"The savings arising from this settlement brings the total savings to the public purse from the Locog venue security budget to £102m compared to the position in December 2011,'' he added.