1. Your questions regarding London's bid for the 2012 Olympic Games are a clear reflection of careful and commendable consideration on the Committee's part. I shall do what I can to answer them, based not least on recent experience of bidding for the 2012 Olympic Games, with the Bay Area Sports Organizing Committee. Of eight US cities, San Francisco made the final pair. Our bid lost to New York City in the race to represent the USA, receiving some 40 per cent of the vote, after emotionally-charged presentations to the US Olympic Committee on 2 November 2002.

Summary:

• The scars of recent British fiascos have healed and are fading. History and recent successes offset them;
• London has the basis for a stronger bid than New York City, Paris and other likely 2012 contenders;
• London's estimates for the cost of bidding are reasonable;
• Bidding and losing can still improve sport in London;
• Facing strict IOC rules, 2012 bids must demonstrate transparency, great technical competence and immense creativity;
• The IOC has mandated a more cost-efficient approach to operating costs than that adopted by Arup;
• Operating excesses from hosting the Olympic Games can pay for fresh sporting and transport infrastructure;
• Sporting and financial benefits would accrue to the entire UK but would disproportionately favour London.

2. The Picketts Lock, Wembley and Euro 2006 issues have already been offset by Commonwealth Games perceived internationally as a great success. In 2005, when the IOC makes its decision, those mistakes will have faded further from memory and can be further offset by the continued and even expanded staging of international events in the UK. Concerns about Britain's ability to influence international sports bodies merely echo those voiced by other nations. For example, the USA's ability to influence international sporting opinion was called into question in 2002, when Americans were surprised to lose the 2007 Pan American Games to Rio de Janeiro.

3. Historically, London has been the city capable of hosting the Games even when no other city was ready. It has bid against international competition before, for the (cancelled) 1944 Games, and won by a country mile. And whereas ten years ago British athletes had their unemployment benefit cancelled for competing in the Olympic Games, now they are properly funded. Such initiatives have not gone without international respect and admiration.

4. Managed properly and supported wholeheartedly, London has the basis of a better technical bid than its likely competitors. The area chosen for London's bid, the Lower Lee Valley, lends itself to an attractively compact design for the Games. There would be only minimal distances between key sites. Such is the basis of a technically superb bid. Together with its press and broadcasting centres, London's Olympic Stadium, swimming pools, gymnastics facilities and sites for more than a dozen other sports would all lie within two miles of the Olympic Village. New York City 2012, for example, places only its track cycling, badminton, archery and beach volleyball venues within two miles of its proposed Village. Indeed, in the face of the same opposition that derailed Mayor Giuliani's earlier plans for a Manhattan stadium, NYC 2012 has already named Flushing Meadows Park as a backup location for its Olympic Stadium: more than six miles from its Village and further still from its media facility.

5. Paris was previously mentioned by the Select Committee as likely to submit a strong 2012 bid. In the absence of an independent report, as suggested by the Committee, UK Sport's report on 2012 bidders also appears to favour Paris. But Paris will not be able to put forward a compact venue plan, on account of new development around the Stade de France. On 10 December 2002, Paris 2008 head Claude Bebear said: "A Paris bid for 2012 is possible but it will more difficult than in 2008, mainly because the land for the planned Olympic village is no longer available." Paris's 'less difficult' 2008 bid received 15 of 112 first-round votes. Istanbul received 17.

6. London's estimate of some £15 million (2002 prices) for bidding operations is reasonable and is comparable to US bid city projections. Apart from necessary land acquisition, additions to that total should include only elements certain to further improve the quality of sporting life in a clear fashion. Examples might be the sponsorship of sporting events in London, or upgrades to existing venues (such as the creation of an international-standard swimming facility at Crystal Palace) as a requirement of hosting sports events. The opportunity to attract private support to assist with such projects—under an Olympic banner—is a good reason to bid.

7. Even bidding and losing is likely to leave London richer in terms of sporting heritage. San Francisco for example, has added to its annual sporting calendar in ways not possible without the support generated by its 2012 bid. The San Francisco Grand Prix, a world class bicycle race now two years old and enjoyed by 400,000 spectators, is a prime example.

8. The 2012 bidding process will follow the same rules as the 2010 bidding process. They preclude visits from IOC members, the soliciting of IOC members in any way and ban all international campaigning. These rules are stricter than those in force for 2008. Under the latest rules, for example, Beijing would not have been able to implement the international PR campaign that helped it overcome international criticism of human rights abuses. Differences in IOC contact by the lead 2012 contenders will be marginal, as bid teams assemble in the same lobbies of the same hotels at international sporting events, hoping to catch the attention of passing IOC members.

9. The quality of final presentations will be crucial. Tied to an immaculate technical bid, the ability of the London 2012 team to harness the commercial creativity that has put the UK at the forefront of world advertising will be crucial. Transparency will also be vital. Secrets and surprises will have no place in a successful 2012 bid and the Select Committee is to be commended for its previous recommendations in this regard.

10. In order to be successful at the IOC level, London will have to put forward an operational budget more modest than that outlined in the Arup report. In 2000 money, Sydney's operating costs were £ 793 million. In 2002 money, Arup predicts operating costs that are more than double that. On the contrary, the IOC's recommendations are clear. The final report of the IOC Co-ordination Commission for the Sydney 2000 Games stated: "Measures will have to be taken to control the future growth of the Games. The Games certainly must not be allowed to grow any larger, otherwise they will present a major risk."

11. In all fairness, both San Francisco and New York City prepared operating budgets similar to those prepared by Arup. It was only in November of 2002 that the IOC clearly indicated the new way forward: "An effort must be made to stop the current benchmark inflation by clearly establishing what must be delivered for the purpose of the Games. A thorough study of the evolution of service levels will help define a reasonable standard to be provided in the bidding stage . The effort to stop this benchmark and service inflation must begin at the bidding phase. Bid cities should be better educated in order to avoid over-bidding and making unnecessary promises. The need to address sustainability aspects in the bidding stage should be stressed," stated the interim report of the Olympic Games Study Commission.

12. Following the adoption of this new, more cost-conscious approach, the IOC has already told Beijing's Organising Committee to cut back some proposed venues and completely eliminate another. The IOC's new approach will allow London to satisfy the needs of the IOC at considerably less expense than Arup's predictions, which were based on extensive comparisons with other bids and major sporting events.

13. While operating costs for future Games will be kept in check, revenues are likely to continue to rise at pace. 2012 operating revenues are likely to exceed operating costs by hundreds of millions of pounds. By assuming responsibility for infrastructure projects, a London Organizing Committee of the Olympic Games could use Olympic revenue to pay for significant capital improvements to the Lower Lee Valley. Meanwhile, the benefits from increased tourism will account for hundreds of millions more, paying for further infrastructure improvements and leaving a legacy of jobs to complement new sports facilities, increased national pride and greater sports participation.

14. The Olympic Games can pay for fresh sporting and transport infrastructure in London. But infrastructure attributed to a London Games could cost billions more. Argue that Crossrail is an Olympic project and the Games will clearly never be a profitable enterprise. Regardless of new transport projects with an Olympic label, in 2012 two Underground lines, the Docklands Light Railway, multiple overground rail links, the Channel Tunnel Rail Link and an airport will serve the Lower Lee Valley. Currently, the site of New York City's proposed Olympic Stadium is not even on that city's Subway map.

15. A London Olympics would deliver fresh revenue throughout the UK. The football tournament, for example, would spread the financial and also the intangible wealth. Training camps for visiting teams will be another important source of revenue, pride and involvement for those outside the capital. London, however, must remain the sole focus of the Games. The IOC will not consider bids involving multiple host cities.

27 December 2002