LONDON—The management committee for the London 2012 Olympics is committed to sound risk management, according to David Law, head of risk and audit, Olympic Delivery Authority.

Speaking at the Association of Insurance and Risk Managers "2012: Risks and Rewards Seminar," Mr. Law acknowledged that, "the United Kingdom has a chequered history in delivering major projects on time and within budget." But he made it clear that there was no margin for error with regards to completing the project on time, though he refused to comment on reports of the cost of the London Olympics running massively over budget.

Mr. Law emphasized the scale of the project as the source of the inherent risks. "It is the largest peacetime project in the United Kingdom and possibly in Europe," he said. At 670 acres, the Olympic Park will be 10% larger than Hyde Park. Constructing the site will involve removing electricity sources in the area, which provide a third of the power for the City of London, and channeling it underground, as well as extending public transportation in the area to accommodate the estimated 500,000 visitors a day to the Olympics.

Mr. Law said that the ODA had been in consultation with other largescale U.K. projects, such as Terminal 5 at Heathrow, the Millennium Dome, Wembley Stadium, the Emirates Stadium and Kings Cross/St. Pancras, in order to learn from those involved.

Also speaking at the seminar was David Boss, senior vice president, power and utilities practice at Marsh Construction. Mr. Boss addressed those attending on managing risk on largescale projects in general, and warned that they ignore risk at their peril.

He emphasized the importance of having a risk matrix of the likelihood of possible risks and the consequences of their occurring, and an analysis of that matrix as critical in the management of a project like the 2012 Olympics.

Mr. Boss divided risks into "obvious risks" such as fire, storm, terrorism and pollution, and "less obvious risks" such as additional increased cost of the work to be done and unforeseen ground conditions, which would mean looking at the availability of alternative venues. He also warned about rising commodity prices (steel, for example) and labor shortages and disputes which could disrupt projects.