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12 February 2013 | Helen Gilbert
G4S will incur losses of up to £70 million after striking up a compensation deal with the London Organising Committee of the Olympic and Paralympic Games (LOCOG).
The company, which failed to recruit and train enough security guards for the 2012 event, had set aside £50 million but will now pay a further £20 million on top of this.
In a statement, G4S said today the main difference between the previous estimate and the final settlement was an agreement to waive a larger proportion of the project management charge.
In addition to this, the group has lost a further £18 million through charitable donations, external fees, sponsorship and marketing costs.
G4S CEO Nick Buckles said: “While we are extremely disappointed to find ourselves in this position, we are pleased to have concluded these negotiations with LOCOG.
“We have accepted responsibility for the security workforce issues and, as a result of the settlement terms, which we have announced today, have ensured that the overall cost to the taxpayer has been reduced significantly against the planned cost.”
Last month, SM reported how G4S turned down an offer to supply fewer security guards for the 2012 games during a re-negotiation of a revised security deal, because it was confident it could meet the higher requirement.
In September, chief operating officer David Taylor-Smith and Ian Horseman-Sewell, MD for G4S Global Events resigned over the fiasco.