The security firm 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 for failing to meet its contractual obligations.
Speaking publicly for the first time since details of the fiasco emerged, he admitted that the firm has caused a "huge problem" after 3,500 troops had to be drafted in at the last minute to make up the shortfall.
G4S was initially contracted to provide 2,000 staff for £86 million but, following a review of security requirements last year, that was increased to 10,400 personnel while the value of the contract more than trebled.
However on Wednesday, with just over two weeks to go until the opening ceremony, it emerged the firm was not going to make the numbers and additional troops would be required. Despite having signed the initial contract in 2010, Mr Buckles said that he had only realised "eight or nine days ago" that there would be a shortfall.
He disclosed that G4S now faced a penalty charge "in the range" of £10 to £20 million for failing to honour the terms of its £284 million contract with Locog. However he said that the bulk of the losses would come from having to pay the Ministry of Defence for the costs of providing the additional troops. He apologised directly to the troops involved - some of whom have been forced to cancel leave and holidays after arduous operational tours in Afghanistan.
Mr Buckles, who now faces a grilling on Tuesday by the Commons Home Affairs Committee, insisted the company had kept both the Government and Locog fully informed about what was going on.
Shadow Olympics minister Tessa Jowell said that while there were questions to be asked about what had gone wrong, the post-mortems should wait until after the Games were over.