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Localities see raw deal in Tokyo Olympics cost-sharing plan

Gov. Koike scurries to project strength ahead of assembly elections

Tokyo Gov. Yuriko Koike speaks at a May 31 meeting in Tokyo about who will pay for what to host the 2020 Olympics.

TOKYO -- The organizers of the 2020 Tokyo Olympics agreed at the end of May on a broad framework for sharing the costs of hosting the event But they shelved the issue of how much local governments outside Tokyo should shoulder, an outcome that will continue to haunt Tokyo Gov. Yuriko Koike as she looks ahead to upcoming assembly elections.  

The agreement was reached on May 31 between the central and Tokyo Metropolitan governments, the Tokyo Olympics organizing committee and the local governments hosting events to be held outside Tokyo.

The failure to reach a conclusive deal reflects simmering distrust in Koike, who initiated the review over how costs will be divided.

After the meeting, all of the local leaders appeared to welcome the deal. "It's close to perfect," said Yuji Kuroiwa, governor of Kanagawa Prefecture, Tokyo's southwestern neighbor. Gov. Kensaku Morita of Chiba Prefecture, located just east of Tokyo, said, "We're finally back [to the substantial part of preparation for the games] and on the starting block."  

Similarly, Yoshiro Mori, the president of the Tokyo Organizing Committee of the Olympic and Paralympic Games, expressed optimism when he said, "We've advanced a few steps ahead."

Not so fast

But the smiles for the cameras belied deep divisions between the Tokyo government and localities hosting some events. 

Tokyo wants them to shoulder some of the costs, something those outside the capital are reluctant to do. Negotiations over the matter began early this year with an initial deadline set for the end of March. That date came and went, and the timeline was extended to the end of May. But the two sides have still not reached a final agreement. 

Koike wanted to strike some sort of deal by May 31 to project an image of strength before Tokyo assembly elections scheduled for July -- even if that meant putting off cost discussions for later.  

After the meeting Koike emphasized the positive developments made with the other governors. She added that her team has also found ways to cut 115 billion yen ($1.05 billion) from the estimated total cost the organizing committee revealed late last year.

Nonetheless, an agreement on cost sharing is long overdue. According to one organizing committee official, negotiations were supposed to end before the 2016 Rio de Janeiro Olympic Games got started -- which is before Koike's tenure even began.

Election pledge

Koike took office in August that year, succeeding Yoichi Masuzoe, who resigned two months earlier amid a scandal involving his misuse of government money. She subsequently put off the cost-sharing negotiations and instead started a review of three venues planned to be newly built in Tokyo aimed at cutting the ever-increasing budget for the games. 

After facing strong resistance from sports associations in Japan and failing to find alternative locations already built, Koike gave up on her vision to stop the construction of costly new facilities. 

But Koike did not give up on her campaign pledge to review the cost-splitting framework. 

Last September, a Tokyo Metropolitan Government study group revealed a surprise plan calling on localities selected to host events outside the capital to cover some of the costs to renovate existing facilities. The local governments were blindsided by the idea, which drew their ire. But Koike pressed on, calling these "semi-host cities" to foot part of the bill. 

The localities had originally offered to host some events in response to Tokyo's call for help in cutting costs. Feeling that offering assistance was payment in itself, they took the call to shoulder additional costs as a slap in the face. 

They also pointed to the fact that Tokyo's original submission to the International Olympic Committee clearly states that the costs of building temporary structures are to be covered by the organizing committee and that the Tokyo government will shoulder any amount the committee is unable to bear. 

Alas, the organizing committee's budget has already been exceeded and cannot cover the construction of temporary structures. Yet the localities continue to assert that Tokyo should fulfill its submission pledge and pay for any temporary structures. 

Amid this deadlock, the negotiations drag on. 

Along the way, the local governments grew alarmed that preparations for events were being delayed by the budget impasse. To overcome the standstill, some governors visited Prime Minister Shinzo Abe on May 9 and asked for help to expedite the process. 

Two days later, Koike met with Abe and told him Tokyo would pay the about 55 billion yen needed to cover the entire cost of constructing temporary structures. 

Subsequent media coverage made Koike look indecisive and in need of the prime minister's firm hand. Koike complained she had been set up, claiming the meeting with Abe had been scheduled before the governors asked Abe to step in. 


All of which brings us back to the issue of splitting the cost of hosting the games, pegged at 1.38 trillion yen.

The Tokyo municipal government and the organizing committee agreed to foot 600 billion yen each, while the central government will contribute 150 billion yen. But the localities remain reluctant to cover the remaining 35 billion yen, attributed to the cost of hosting events outside Tokyo. They are unconvinced about the grounds for the figure. During the May 31 meeting, the local governments would not budge. 

A Tokyo metropolitan official said Koike needed an agreement -- an accord of any kind -- even if it was in the form of a broad framework because she wanted to shed the image of having a poor relationship with the localities. 

Her image has already been eroded as the Liberal Democratic Party, in a clash course with her camp in the election, is actively criticizing her as being indecisive not only for the prolonged Olympics cost issue but also for the stalled relocation plan for Tokyo's Tsukiji fish market to the Toyosu district.

Koike has an uphill climb to get the localities to accept the cost-sharing deal. To make matters worse, a recent escalation of terrorist acts around the world will likely raise those costs further as greater security will be needed to successfully put on the games. 

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