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Tokyo 2020 Olympics

Tokyo Olympics cost doubles to $13bn on COVID and overruns

Snowballing budgets raise questions about taxpayer burden

The Summer Olympics in Tokyo proved costly to Japan, owing to construction cost overruns and a one-year delay from the pandemic. (Photo by Kento Awashima)

TOKYO -- The price tag for last summer's pandemic-delayed Tokyo Olympics and Paralympics ballooned to 1.42 trillion yen (about $13 billion based on 2021 rates), nearly twice the initial estimate, with taxpayers footing 55%, the Tokyo organizing committee said Tuesday.

The report broke down the bill between the committee, which received funding from sponsors and the International Olympic Committee; the Tokyo government; and the central government. The share for the latter two came to 783.4 billion yen -- roughly 80% more than the 432.7 billion yen estimated in 2012. The total estimate was 734 billion yen at that time.

Major cost overruns for work on competition venues were one of the two main factors behind the underestimate. The National Stadium, for example, cost 156.9 billion yen to build, 27 billion yen more than expected.

"The figures were presented based on IOC rules, but the initial estimates were too optimistic," a former senior official on the committee said.

The other culprit was unexpected changes in the circumstances surrounding the Games, including soaring prices for materials and coronavirus countermeasures. Steps to curb the spread of COVID-19, such as testing for athletes, cost 35.3 billion yen alone.

The committee had predicted in December 2020, after the Games were postponed amid the pandemic, that the cost would swell to 1.64 trillion yen because of such additional expenses as labor and facility rental fees. After the event, the estimate was cut to 1.45 trillion yen last December.

The additional reduction in the latest figure owed to venue restoration costs coming in below budget.

Once the organizing committee is dissolved at the end of this month, documents related to the Games will go to the Tokyo government. "The metropolitan government will eventually need to carefully assess the expenses and provide an explanation to Tokyo residents and the Japanese public," said Naofumi Masumoto, a visiting professor of Olympic studies at Tokyo Metropolitan University.

Revenue is another problem. With essentially no spectators allowed, the Games lost out on an anticipated 90 billion yen in ticket sales.

Skyrocketing budgets have been a perennial problem since the 1984 Summer Games in Los Angeles as the event has become more of a spectacle and increasingly commercialized, and the number of cities willing to take on this burden has been shrinking. The IOC has been emphasizing lower budgets in the bidding process, and candidate cities promise a "compact" Olympics in their bids.

Sapporo, which is bidding for the 2030 Winter Games, last November cut its budget estimate to between 280 billion yen and 300 billion yen, with the city's share lowered to 45 billion yen from as much as 60 billion yen. Yet polling shows that some residents still oppose the idea for reasons including the cost.

"Sapporo needs to analyze the costs of the Tokyo Olympics and further cut down on waste," said Hisashi Sanada, a professor of physical education at the University of Tsukuba.

Once the committee dissolves, attention will shift to how to use seven new venues built for the Games.

About 3,000 people attended a reopening event Saturday for the Oi Hockey Stadium, featuring exhibition matches by Japanese national teams, including the hockey team, along with touch rugby games for kids. The stadium plans to host events and competitions for sports besides hockey, aiming to draw 200,000 visitors in fiscal 2022.

The Sea Forest Waterway, a rowing and canoeing venue, looks to host 70 competitions and 150 fitness classes a year and will market itself as a site for film shoots and corporate training programs.

Of the six new venues for which data is available, five are projected to rack up annual losses totaling 1.09 billion yen. To rein in the red ink, the Tokyo government plans to market these facilities for nonsports events.

Those facilities "have great value as sites where the Games were held," said Munehiko Harada, president of the Osaka University of Health and Sport Sciences and an expert on sports business.

"Creating a good environment for events and day-to-day use by the public will attract people and burnish the area's brand," he said.

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