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  • Wednesday 25, November 2020
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Tokyo cuts estimated budget for 2020 Olympics to $12.6 billion

Tokyo cuts estimated budget for 2020 Olympics to $12.6 billion

TOKYO: The latest price tag for the 2020 Tokyo Olympics has been trimmed slightly, but is still nearly twice the initial estimate even after a major cost-cutting effort as the city comes under pressure to keep a lid on spiralling costs.

Organisers unveiled on Friday a budget of $12.6 billion for the next Summer Olympics, a $300 million reduction from projections earlier this year, and said they are targeting more cuts in a bid to reduce the burden on Japanese taxpayers.

The overall games budget now stands at a total of 1.35 trillion yen ($12.6 billion), organisers said in a statement.

When Tokyo won the Olympics in September 2013, its bid was for 730 billion yen. That ballooned to over 3 trillion yen but was slashed to 1.4 trillion yen after Tokyo Governor Yuriko Koike launched a cost cutting campaign last December and $0.3 billion compared to an interim figure agreed in May.

Organisers have managed to cut still more from the estimated cost by moving some events outside of Tokyo and using existing and temporary facilities.

“Going forward, Tokyo 2020 will continue to seek further cost reductions, particularly in the areas of event operations, transport, accommodation and security,” organisers said in a statement.

They hailed a “significant reduction in costs” resulting from “sustained efforts ... to avoid recourse to public funds.”

Tokyo’s Games won’t be the priciest ever: the 2012 London Olympics cost $19 billion, compared with the bid estimate of $6.5 billion.

Cities tend to exclude large amounts of associated costs when they submit a bid to host the Olympics. Such bids usually include only core components such as the main facilities so that the bids are easier to compare. Building design, security measures, transportation and other costs are largely excluded.

Thomas Bach, who took over as IOC president in 2013, has sought to slash costs to entice cities to bid for future Games and minimise damage to the Olympic brand. The IOC has urged Tokyo to cut $1 billion more.

The addition of five new sports after Tokyo pushed the tab up, but one of the biggest factors is rising construction costs.

“We want to deliver fantastic Games but at the same time ... we don’t want to use any public funds if we can help it,” said Hidemasa Nakamura, the chief financial officer of Tokyo 2020. “We will continue to try to reduce [costs] further.”

The Tokyo Metropolitan Government accounts for $5.6 billion of the latest budget and Japan’s central government $1.4 billion, according to the organisers’ estimates.

“We are still looking at the overall Games with the big purpose of reducing costs overall, and in the process we need a clear explanation that is compelling, not just for Tokyo citizens but for all Japanese citizens,” Tokyo Metropolitan Government official Tetsushi Koyama told a news conference.

Version one of the budget, issued in December last year, was projected at $14 billion. Version three is due out in December 2018.

IOC Vice-President John Coates said earlier this month he was confident significant savings would be achieved ahead of the Games but warned organisers needed to remain vigilant.

“We hope to draft [budget] plans so that Coates will say ‘good job’ at the end,” Nakamura said.

“I think there is a need to shrink costs further in version three and continue that in version four.”