Tokyo Olympics Set To Maybe Cost A Tiny Bit Less, Maybe
Such plans rarely work
Organizers for Tokyo’s 2020 Summer Olympics disclosed a working budget of $16.8 billion in response to the International Olympic Committee’s pressure for a degree of Olympic austerity in the wake of bloated hosting costs by recent cities—particularly the 2008 Summer Games in Beijing ($40 billion) and the 2014 Winter Games in Sochi ($51 billion).
“This is Version 1,” Toshiro Muto, CEO of the organizing committee, said, according to the Associated Press. “We will continue our cost-cutting effort toward our Version 2.”
The IOC vice president, John Coates, overseeing the matter said he was “very, very pleased” though, he added, “We need to do more work there. But the feeling we have is that there are savings to be found there.”
The reality is, of course, that the $16.8 billion figure—of which taxpayer money is expected to account for about $12.1 billion—is as fanciful as a unicorn. New Tokyo Governor Yuriko Koike commissioned a report, which was released in September, that said the “Full-Robot” Olympics could cost as much as $30 billion, i.e. nearly double the current estimate and roughly quadruple the original plan.
“I appreciate we have reached a very significant milestone,” Koike said, per Reuters. “We are still keen to see further savings.”
That alarm-bell figure sprung some action on the part of organizers to scale-down some construction and design, leading to multi-party talks among the IOC, the organizing committee, Tokyo’s local assembly, and the national government. Koike, who was elected long after Tokyo was awarded the Games, said the review led the organizing committee to pare $340 million out of the budget.
Among the cost-conscious measures that have been considered: moving some events away from the expensive major city and even holding some in the Fukushima Prefecture, the region beset by an earthquake, tsunami, and nuclear reactor accident in 2011. Previously, the first Olympic stadium proposal, which featured a sleek, dramatic, and futuristic design but would have cost $2 billion, was scrapped for a comparatively simpler, $1.5-billion version.
So this is clearly progress away from unconscionable public largesse, but don’t hold Tokyo to that $16.8 billion figure. The Rio de Janeiro Games last summer went 51 percent over budget—and that was a few ticks better than average! Researchers at the University of Oxford’s Said Business School have studied Olympic Games’ expenditures and found that the mean is a 56 percent overrun, with the ultra-important proviso that it the figure included “only sports-related costs, i.e., wider capital costs for general infrastructure, which are often larger than sports-related costs, have been excluded.”
Indeed, a plan to use the existing Yokohama Arena for volleyball has fallen by the wayside in favor of a brand-new arena that will be constructed to help spur development in that area.
“We’re not taking just that venue as a final point,” Koike said, per the Japan Times. “We want to redevelop that whole area. This is not just about cost. We’re considering this as an investment for the future.”