2024 Olympics and shortage of building materials: will everything be ready?

Olympic Games 2024: a project that lives up to the ambitions of the capital

Beyond security or communication issues, the organization of the 2024 Summer Olympics also represents a major logistical challenge for France.

The good performance of the competitions presupposes in particular the construction of a large number of new structures, spread over the whole of Greater Paris and elsewhere in France.

Solideo, chaired by the mayor of Paris Anne Hidalgo, is the delivery company for the Olympic works.

The structure has the heavy responsibility of ensuring, in conjunction with the construction companies, the respect of construction deadlines for all the sites essential to the future 2024 Olympic Games. This includes no less than 45 projects in progress, including five "meta-works" particularly followed at the highest level:

• The

  Athletes' Village

  , which will cover Saint-Denis, Saint-Ouen and Île-Saint-Denis;

• The

  Media Cluster

  , located in Dugny also in Seine-Saint-Denis;

• The Adidas Arena at Porte de la Chapelle in the 18th arrondissement, the only Olympic site planned in intramural Paris;

• The

  Olympic Aquatics Center

  in Saint-Denis, opposite the Stade de France;

• The

  Marina

  in Marseilles.

The schedule therefore turns out to be ambitious to say the least... Will the deadlines be met?

Within Solideo, the speeches are generally reassuring: the structural work would already be more than 80% completed on the various construction sites, with the objective of reaching 100% by spring 2023. The schedule initially established in 2018 would therefore be respected, without overspending.

Olympic Games 2024: what budget for carrying out the work?

Solideo's budget amounts to approximately 4 billion euros in total.

This sum includes first of all grants and public subsidies from the State, the regions and the City of Paris, up to 1.55 billion.

The rest of the funds are provided by private patrons and sponsors.

The total budget for the 2024 Olympics, all expenditure items combined, should approach 8 billion euros – barring unforeseen overruns.

Shortage of materials and rising prices: the surprise guests of the Olympics

In four years, the building materials market has seen many upheavals.

The effects of the global pandemic of 2020 and 2021 continue to be felt today, and have significantly disrupted supply chains.

More recently, the conflict in Ukraine has of course brought to light additional tensions for the construction industry.

Some essential materials on modern construction sites have experienced dramatic price variations in recent months, linked to a depletion of supply and sometimes stockouts.

• Steel is essential to the

  structure

  of Olympic venues, designed to withstand large crowds.

  As early as 2021, the health crisis had led to a temporary but very painful increase of 200% in the selling price of this metal on the wholesale market.

  After a new price spike in April 2022 due to the war in Ukraine, the situation is stabilizing.

  In the last six months, a decrease of 52% has been observed.

• Aluminum has also joined the club of rare and expensive

  resources

  for builders.

  The price is currently stabilized around $2,400 per ton.

  However, it experienced violent variations at the start of the year, reaching $3,900 in March 2022, for example. This almost doubling of prices was hit hard by many manufacturers needing to refuel.

Other materials have recently been subject to unusual market valuations.

This is the case for

and

, whose prices have seen an uninterrupted rise between April 2020 and April 2022.

,

and

have also become harder to find.

These rapid and significant variations are particularly dangerous for construction professionals.

The latter, in fact, are not always able to pass on price increases to the end customer:

• Unless otherwise stated, the prices set in the quote or the contract cannot be modified later by the service provider.

• Due to the shortage situation, it is more difficult to obtain supplies in large quantities and to accumulate large stocks.

A mediation protocol between Solideo and the building federations

Could the current difficulties in supply and rising prices derail the meticulous planning of the delivery of Olympic venues?

In any case, building professionals do not hide their concerns, and wish to allow themselves the possibility of renegotiating certain terms of their contracts.

At the end of October 2022, Solideo officially announced the signing of a

with the main players in the building industry, including:

• The French Federation of Greater Paris Building;

• The regional federation of public works (FRTP) of Île-de-France;

• The Association of Construction Products Industries (AIMCC);

• The Confederation of Wholesale and International Trade (CGF);

• The confederation of crafts and small building companies (CAPEB).

The aim of this initiative is to iron out any difficulties encountered by the prime contractors in charge of delivering the various sites.

According to Nicolas Ferrand, Executive Director General of Solideo, the objective is above all to "deliver on time, on budget and in line with the ambitions of all the Olympic structures".

This protocol provides for a forum for discussion between the various parties involved, under the neutral arbitration of the

.

The principle ?

Resolve amicably and as quickly as possible any disputes that may arise during construction, before delivery of the site.

Towards an increase in the real estate cost of the 2024 Olympics?

In practice, mediation should in particular allow the construction sector to renegotiate the prices of certain services.

The goal, according to Solideo, is “to better absorb market tensions”.

This does not therefore exclude an increase in the invoice to take into account the consequent increase in the price of materials.

With, as a result, a more or less significant overrun of the budget for the next Olympiad.

Olympic Games 2024: what solutions to meet budgets and deadlines?

The implementation of the mediation protocol is a reassuring first response for professionals in the sector.

The latter should be able to count on a budget extension if the evolution of the prices of materials makes it unrealistic to respect the initial estimates.

The constant fluctuation of material prices, in fact, leads many companies in the sector to place orders without knowing the price upstream.

In this context,

and the

constitute a real response to the supply challenges for professionals.

Some emerging and 100% online players have already proven their usefulness during the recent period, marked by stockouts and pricing upheavals.

platform

, a benchmark in the field of international B2B sourcing and a brand of the

group .

With approximately three million companies listed, the site's database very often allows free contact with a new contact to compensate for the failure of a usual supplier.

***

Will the major Olympic sites be able to welcome their millions of spectators under the conditions planned for 2024?

The work has so far not experienced any major delays.

However, the final invoice is not immune to a significant overrun of the planned budget, due to unfavorable market trends.

The three key points to remember:

• Preparation for the 2024 Olympics involves the delivery of several dozen major projects in Greater Paris and elsewhere in France.

• The builders, faced with rising prices and shortages of certain materials, have mediated with the Olympic venue delivery company.

• The search for new suppliers can be facilitated by using certain B2B sourcing platforms such as Europages.