G4S reportedly unable to deliver on Olympics contract
G4S has plunged after embarrasing reports have emerged over concerns the FTSE 100 security solutions firm will be unable to provide the 13,700 guards it is contracted to deliver for the London Olympics, prompting organisers to call in as many as 3,500 troops from the military.
Government ministers have reportedly been pushed into the decision with just two weeks before the Olympics begin having given G4S up until now to deliver on its promise.
Organisers are said to believe G4S needs to provide 19,000 security guards to fulfil its £284m contract, requiring 10,400 licenced guards and 3,300 students.
The share price fell 2.38% to 283.50p in early trading.
According the Guardian, a Whitehall insider has accused the Home Office of "sticking its head in the sand" over the need to deploy extra military personnel.
The insider is reported to have said: "This has been an accident waiting to happen. The Home Office has waited to make a decision on this because G4S has been saying it is all in hand. But we've run out of time."
The Ministry of Defence is now considered to be an insurance policy in the event G4S is unable to come up with the goods. The Ministry is said to be seeking assurance that any soldiers who are drafted in last minute will be full compensated for cancelled leave.
The Whitehall source was keen to emphasise that security is not at risk in any way.
Back in December the London organisation committee, Locag, was forced to admit it had grossly underestimated the number of staff it would need to provide security at the Games, revealing it would likely need as many a 23,700 staff as opposed to the 10,000 it originally forecast, helping to push up the budget from £282m to £553m.