Olympic Park tower ‘saddled with debt that will never be repaid’

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Orbit TowerImage copyright Getty Images
Image caption The corporation that runs the tower says it is value for money

A slide built to rejuvenate London’s Olympic Park is not attracting enough visitors and is “saddled with a debt that will never be repaid.”

The attraction, which was added to the Orbit Tower in June last year and has had 138,245 visitors, is £12.2m in debt with interest growing by £700k a year.

Some London Assembly members have said the debt could be passed to taxpayers.

The London Legacy Development Corporation said it was under no deadline to repay the debt.

It added it will only do so when it made a profit and that visitor numbers were at the higher end of its projection.

‘Poor value for money’

Since the tower, which is the UK’s tallest sculpture, was built by steel company ArchelorMittal in 2012, concerns have been raised about its financial viability.

In the financial year of 2016-17, 13,548 people bought an annual pass. But since April this year only 184 have.

In 2016, the slide was added to try to bring in more income from tower visitors.

At £16.50 a ticket, about 740,000 adults would need to go down it to pay the current debt.

Andrew Boff, Conservative London Assembly member, said: “The tower itself is poor value for money. I don’t think the visitor numbers justify the costs and it’s not a bold visitor attraction.

  • 2.76 million Have used the Aquatic Centre since 2014-15, 16% more than its target

  • 80,000 People have participated in events

  • 13,000 People have worked in the Park since the Games

PA

“The mindset is almost, ‘let’s chuck it on a credit card and forget about it’, and that way of thinking hasn’t exactly worked out well in the past.”

He added: “They gave the impression that ArchelorMittal were going to pay for all of it, then we had the slide and running costs so what’s to say that taxpayers won’t pay more in the future?

“I hope we never again have an Olympic Games in London.”

When the tower was built, it was gifted £10m by ArchelorMittal, who then also loaned it £9.2m.

The debt does not have to be paid until it has cleared other debts, such as the cost of installing the slide.

The contract also stipulates that once it makes a profit, 50% goes to the London Legacy Development Corporation and 50% pays back the loan.

Andrew Dismore, Labour London Assembly member, said the debt would never be repaid.


ArchelorMittal Orbit Tower

  • Designed by Turner Prize-winning artist Anish Kapoor
  • Boris Johnson, who was London mayor at the time, said it would be “the perfect iconic cultural legacy
  • Opened in 2012 as an observation tower
  • It closed after the Games while it was adapted for long-term use, and reopened in April 2014
  • Since 2012, 632,000 people have used the tower
  • Nearly 3,000 have paid to abseil down it, while eight weddings have been held there

“A debt is still a debt and it’s a growing debt,2 he said.

“The money that is owed on the loan and the interest could be spent on other more important services.”

The London Legacy Development Corporation said the current deal meant the loan would be paid from profits so taxpayers’ money was not being diverted from other projects.

A spokesman said: “It’s a favourable deal for the taxpayer as it allows the tower to get established and to make a profit before the debt is repaid.

“There’s no set target, it will be repaid once we can.”

Thursday marks the fifth anniversary since the Olympic Games was held in the city.


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