Why big public contracts always go over budget

Shock horror! Yesterday the London newspapers announced that a government body says that the already huge cost (£10bn?) of the 2012 Olympics is in danger of dramatically increasing further.

Why the big surprise?

Any self respecting salesperson knows that the price of product is far higher if the buyer needs it for a specific date, than if he/she is in no hurry. The closer to the event, the more they'll pay to get the product in time.

Contractors do not agree to everything from the outset because they know that the price of the 'extras' required later will massively increase as the event approaches. I'll bet that, in 2012, 3 months before the start, one of them will announce that the Olympic committee has asked for something that was not in the original agreement and that only a massive effort by them, suitably rewarded, will ensure the success of the event.

Ah, where would the contracting business be without the ambitions of politicians?