G4S takes the blame for Olympic security fiasco
Sun, 15 Jul 2012 2:59p.m.
Security company G4S has admitted it underestimated the task of supplying 10,000 guards for the London Olympics.
Chief executive Nick Buckles confirmed the firm was facing a loss of up to 50 million pounds for failing to meet its contractual obligations.
The company has been at the centre of a political firestorm after the government admitted that extra troops would need to be put on standby dye to G4S's problems processing applicants in time for the Games that start in two weeks' time.
Shares in the FTSE 100-listed G4S have fallen in the past 24 hours to their lowest level for almost a month.
"Well we undertook to deliver 10,000 staff," Buckles said on Saturday (July 14). "We agreed that in December last year. It's a very complex process to recruit and deliver that many people in quite a short period of time.
"We interviewed a 100,000, sorry we had applications from 100,000 people we interviewed 50,000. We've got 4,000 people on the ground now, we've got another 6,000 ready to go and another 3,000 in the pipeline. It's just a question of numbers now. It's complex, we have to get them screened.
"Clearly we took on the contract in good faith. We're a vital part of securing the Games. The military have had to be called in to help us through that process.
"We know a number of those soldiers have had to cancel leave to come back and help us through that process. So, you know, we feel that we've caused a huge problem.
"It's down to G4S, we should have...we are contracted to deliver staff we should have done that."
G4S said in a statement on Friday (July 13) that because of difficulties in processing applicants in sufficient numbers through the necessary training, vetting and accreditation procedures, it "will be unable to deliver all of the necessary workforce numbers". No details on numbers were given.
On Thursday, the government put an extra 3,500 troops on standby after it became clear G4S looked unlikely to provide the expected 10,400 guards it was contracted to do so.
Prime Minister David Cameron warned that G4S, the world's biggest security firm, would face consequences for any shortfall.
G4S said it accepted its responsibility for the additional cost of the increased military needed to make up the shortfall.
The company said it would incur other "significant" costs as it tries to meet its contract promises.
"What we're saying is there is a number of issues in terms of cost we've got to look out for," Buckles added. "As a listed company we have to be very transparent about what's going on. We've said there's cost, there will be a loss on this contract of 30 million pounds to 50 million pounds and some of that, a big chunk of that will be down to the military."
G4S's contract, worth an estimated 284 million pounds, includes managing 3,300 students and 3,000 volunteers.
It has said it has about 4,000 staff working at Olympic venues, with more than 9,000 in addition nearing the end of a delayed training process.
About 23,000 security guards had been due to protect venues as part of Britain's biggest peacetime security operation, with 13,500 military personnel already earmarked to contribute.
A call-up of the additional 3,500 troops would take the tally at the Games to 17,000, more than the 9,500 currently deployed in Afghanistan.
G4S employs over 675,000 staff working in areas ranging from cash handling to guarding ships from pirates.
Its contract with the London Olympic organising committee (LOCOG) would have seen guards providing airport-style checks to search and screen spectators. They would also be responsible for queue management and protecting the perimeters and equipment.
The company also has contracts with the British government.
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