Tokyo 2020 Costs Now Twice That Of Original Bid Estimate

Tokyo 2020 organizers said this week that the estimated cost of the next edition of the world’s biggest competitive sporting event has ballooned to ¥1.4 trillion ($17.1 billion). As staggering as that figure is on its own, it’s even more revealing when compared to the original Olympic bid cost estimate of ¥730 billion ($8.9 billion). (AP)

Rising construction costs are cited as one reason for the cost increase, although we’ve been reporting on the ever-evolving budget for some time. In 2015, for example, anti-terrorism measures incorporated into plans boosted the projected costs to around $15 billion. Both construction and operating costs of the aquatics, volleyball, and canoeing venues were scrutinized last year, leading to the 20,000-set aquatics center’s price tag to drop from ¥49.1 billion to ¥29.8 billion.

According to Shinichi Ueyama, a Japanese public policy expert who led a Tokyo government investigation into the Olympics’ cost, it is common practice that original Olympic bid figures exclude such costs as building design, transportation and security. Says Ueyama, “Those numbers in the bidding file are almost fiction.” (AP)

“Many advanced nations are now increasingly aware of the pattern and staying away from the Olympics,” said Ueyama. “If you take a survey in any democratic country, people would refuse to have their tax money spent on costly sports events.” Both Budapest, Hungary and Hamburg, Germany were originally in the running to host the 2024 Olympic Games, but dropped out of the race after public pressure from constituents concerning costs.

 

The Rio Olympics are estimated to have cost around $12 billion and the London Olympics four years earlier are estimated to have cost $14.6 billion. Under a new cost-allocation agreement announced this week, the city of Tokyo and the Tokyo 2020 organization committee will bear a cost of ¥600 billion ($5.4 billion) each, with the central government contributing ¥150 billion ($1.4 billion). The remaining costs’ handling are still to be determined.

 

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applesorangesandbananas
4 years ago

Tokyo, turn and run!! Run away as fast as you can, and DO NOT look back!!!!

G.I.N.A
4 years ago

Surprise!

Steve Nolan
4 years ago

Someone should tell this to LA.

Oh, this has been the pattern for decades? Ok.

Guy
Reply to  Steve Nolan
4 years ago

LA has every sporting complex already built. If building costs are the main reason for the rising costs like this article says LA won’t have a problem. LA 2024!

commonwombat
4 years ago

Mr Ueyama is 100% correct; even successful host nations from the fairly recent past (GBR, AUS) are NOT enthusiastic about doing it again in the forseeable future …. and one will suspect that JAP & KOR will join there number over the next few years (even with successful Games).

What & who are we left with ?? CHN is still probably willing, RUS …. has its own issues; Very few W.European cities are after Paris look likely. Will USA see some “sticker shock” with LA ? There is certainly quite a deal of rose coloured nostalgia about 1984. Back then the games were effectively 2/3 the size of what we see now both with regards to sports/events AND competitor numbers.

Billabong
4 years ago

Sports administrators are either finically illiterate or just good a lying to the tax payer when getting government guarantees before submitting their bid. I suspect that it is a bit of both. The problem with this strategy is that the next few bids will suffer even if they are accurate, because the new rule of thumb is to double the estimate, and add a little more for slippage. So if a well worked out bid comes in at $18bn, the government backers and taxpayers will just assume it’s closer to $40bn……and then say NO. The most annoying thing of all, is that the clowns responsible for this debacle are always smiling and laughing about it. Just look at the photo… Read more »

Ken Swim
4 years ago

Athens. Every 4 years. It made sense 2,500 years ago. Looks like it makes sense now.

About Retta Race

Retta Race

Swim analyst, businesswoman.

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