2020 Tokyo Olympic costs keep rising despite efforts to cut

The price tag for the 2020 Tokyo Olympics keeps going up despite attempts to rein in the spending.

Over the last year, organizers have shifted several venues away from central Tokyo and have looked for existing facilities instead of building new ones.

However, in the last week, Tokyo Governor Yuriko Koike has explained that the city will need to more than double the billions it is already budgeting to stage the games. The International Olympic Committee and Tokyo organizers contest this, saying the city’s added costs are for many projects that would have been done — with or without the Olympics.

In late December, Tokyo Olympic organizers said the games would cost 1.35 trillion yen, which is about USD12.4 billion at the present exchange rate of 109 yen to the dollar. But at a news conference last Friday, Koike said the city would spend an added 810 billion yen ($7.5 billion), bringing total games-related spending to 2.16 trillion yen (roughly $20 billion).

Tokyo organizers and the International Olympic Committee have talked openly about the need to cut rising costs, which have plagued recent Olympics and driven away possible bidding cities.

In emails to The Associated Press, the IOC and organizers said the new spending should not be viewed as part of the Olympic costs.

The IOC called the expenses “regular administrative costs” for the city that fall “outside the overall games budget.” Local organizers said the same thing.

Koike contradicted their position.

She said the new costs were for “projects directly and indirectly related to the games.” She included building barrier-free facilities for Paralympic athletes, training programs for volunteers, and advertising and tourism plans.

She said the budget numbers still needed to be studied, and city’s legislature still needed to approve the spending.

“We just presented the rough scale of the costs,” she said. “Tokyo will be the one to cover it, so I presented it because I wanted the Tokyo residents to be aware of it.”

Asked about further cost-cutting sought by the IOC, Kioke said: “it’s not a task only for Tokyo, but the effort should be made as a whole.”

She also played up the decades-long impact of the 1964 Tokyo Olympics, which showed the world a modern, fast-moving and rebuilt the country following World War II.

“Think about what still remains as legacies from the 1964 Tokyo Olympics — the metropolitan expressway and the bullet-train system, for instance,” she said.

Tokyo’s 2020 Olympics are being funded largely by public money. The 2016 Rio de Janeiro Olympics were billed as a split between public and private money. The eventual price tag was about $13 billion — and some estimates put it at $20 billion.

Under Koike’s plan, the Tokyo city government will now chip in 1.41 trillion yen ($13 billion), and the national government will spend 150 billion yen ($1.4 billion). This represents 72 percent of spending to prepare the Olympics. The remaining part comes from the local organizing committee, which will add 600 billion yen ($5.5 billion) in private money.

Tokyo’s winning bid in 2013 was listed at 730 billion yen, about one-third of the list price now.

Bent Flyvberg, in a 2016 study at Oxford University, found the Olympics “have the highest average cost overrun of any type of megaproject. Moreover, cost overrun is found in all games, without exception.”

Flyvberg added in his study that “for a city and nation to decide to stage the Olympic Games is to decide to take on one of the most costly and financially most risky types of megaproject that exists, something that many cities and nations have learned to their peril.” Stephen Wade, Mari Yamaguchi, AP