TOKYO -- The official cost estimate for hosting the Tokyo Olympic and Paralympic Games, which were postponed for a year due to the COVID-19 pandemic, has been raised by 294 billion yen ($2.67 billion) to around 1.644 trillion yen, meaning the event will be much costlier than the 2016 Rio de Janeiro Olympics and likely on par with the 2012 London Olympics, which were the most expensive summer Olympiad in history.
According to a report titled "Regression to the tail: Why the Olympics blow up" written by researchers from the University of Oxford, the average cost for the Summer Olympics between 1960 and 2016 -- excluding the Paralympics -- is $6 billion. But the Tokyo Games will likely be costlier, due to the COVID-19 pandemic and its unforeseen expenditures.
The Tokyo Organizing Committee of the Olympic and Paralympic Games has disclosed expenses associated with the event every year in December since 2016. In last December's announcement, the committee added an infection prevention budget of 96 billion yen.
That sum includes 16 billion yen from the national government to set up an inspection system for athletes and others connected to the Games, including measures such as outsourcing PCR tests for event officials who may come into close contact with athletes and others, and upgrading centers for the collection of samples.
The remaining 80 billion yen in additional costs will be equally split between the national government and the Tokyo Metropolitan Government to finance other anti-COVID measures. The funds will be used to farm out the work of infection control and sterilization at the Olympic Village and canteens.
Aside from these additional measures, expenses have risen for most of the existing items in the 2020 budget. The "operations" budget, for example, showed a rise of 54 billion yen in the cost of managing the village, with the additional expenses coming from the extension of the lease period and the cost of providing medical services.
The extension of contracts to lease vehicles, operate video surveillance systems and outsource the operation of ticketing systems will also raise expenses. The cost of refunds will rise as well.
Expenses for electrical and other equipment, indispensable for running the events, will increase by 20 billion yen because of the need to reinstall such equipment following the Games' postponement last year.
Since the committee announced the outlook for revenue and expenditures in December 2020, the situation regarding spectators has changed drastically. Spectators from abroad were barred from the event in March, while those from major cities in Japan, including Tokyo, were excluded in July.
The committee initially planned to issue around 630,000 tickets to visitors from abroad for the Olympics and Paralympics. Hopes for ticket revenues, estimated at 90 billion yen, have vanished into thin air. This raises the question of who will make up the shortfall.
"We will further step up cost-cutting efforts to carry out the events within our budget," a committee official said, adding, "But if we fail to cover expenses after such efforts, we will hold talks with the International Olympic Committee, the Tokyo Metropolitan Government, the national government and other parties concerned on how to share expenses."
Cost-sharing is expected to be a focal point for discussions, as a big shortfall in ticket revenue is unavoidable.