London locks down for the Olympics

May 30, 2012, 1:00 PM UTC

FORTUNE — On July 7, 2005, one day after Londoners received word that the city would host the 2012 Olympics, terrorist bombs tore through the public transit system, killing 56 people. To prevent a repeat attack and protect the roughly 25,000 athletes, family members, coaches, and officials attending (along with roughly 700,000 spectators), spending on security has topped $1.6 billion. Sydney’s pre-9/11 Olympic security in 2000 cost only $179.6 million.

Some privacy advocates have questioned the efficacy of such huge outlays of taxpayer cash. James Baker, the campaign manager for the privacy organization No2ID, points out that in May, a concerned workman at The Sun tabloid was able to smuggle a fake bomb into the Olympic Park in spite of spite of iris and hand scanners at the site. Baker also wonders if authorities will be able to use the web of surveillance technologies quickly enough to be effective — he points out that in 2009, several of the more than 10,000 license plate scanners around the country detected the car of Peter Chapman 16 different times — he was wanted for arson, theft, and violation of his status as a sex offender. But police were inundated with hits from the system and did not follow up. Two days later, he raped and murdered a teen he met via Facebook.

More: What London visitors face

Baker also worries that after the Games are over, the surveillance tech will remain — and be abused by petty bureaucrats. He notes that local governments in the U.K. have already used anti-terrorism powers to obtain phone records and secretly videotape citizens to see if they are cleaning up after their dogs or taking out the garbage on the right day.

Whether or not every pound is well-spent, games organizers have spared no security expense. This summer, the city will become a fortress, protected by the largest aircraft carrier in the British Royal Navy, Eurofighter Typhoon jets, flying marksmen, more than 23,000 security personnel (including 13,500 British soldiers), and an array of new cameras added to a city that was already among the world’s most heavily surveilled. As part of a $30.2 million contract, the American security company Rapiscan has delivered over 2,700 scanners to provide airport-level security for up to 200,000 visitors a day to the Olympic Park alone. Administering all of the searches and scans will be private guards hired by the U.K.-based security firm G4S, formerly known as Securicor. In its rush to hire and train more than 10,000 guards to provide venue security, the G4S contract has swelled to a whopping $448 million dollars, sparking outrage in Parliament.

For more on the London Summer Games, click on the links below

The (big) bucks behind the 2012 Olympics
Wall Street gets behind the games
Henry Kissinger: Scholar, statesman, Olympic fan
Will NBC’s investment pay off?
Rich Sport: U.S. Olympic swimmers float on cash
Poor Sport: When Olympic athletes have to moonlight
London locks down for the Olympics
BMW’s ultimate Olympic machine
13 steps to keeping the London Olympics safe
London’s extreme Olympic makeover

A shorter version of this story originally appeared in the June 11, 2012 issue of Fortune.