Yahoo Finance 2020 Tokyo Olympics could cost much more than anticipated
A report from the National Audit Board of Japan found that costs for the 2020 Tokyo Olympics will be substantially higher than the projected $7.3 billion that was announced when Tokyo won the bid in 2013.
The audit, released Friday, was separate from an updated budget put out by organizers that showed $12.6 billion in costs — an amount unchanged from last year.
Varying estimates
According to the Associated Press:
The audit lists an added $9.7 billion (1.06 trillion yen) it says are Olympic-related costs that have not been included. In addition, the city of Tokyo has previously said it would spend another $7.4 billion (810 trillion yen) on Olympic-related projects.
But the respected Japanese financial newspaper Nikkei and the daily Asahi calculated Olympic costs could reach $28 billion. Organizers claimed that the audit included broad expenditures that may not be relevant to the Games.
“As in the previous year, their report did not classify the cost of these items and activities based on their direct relevance to the Games,” organizers told the Associated Press. “It aggregated a wide range of projects that could be seen as contributing to the Games, including those that were implemented without regard to the Games.”
The report in the audit called for Olympic organizers to be more transparent in disclosing information regarding costs.
The Olympics seem to be popular in Japan, with the AP reporting that ticket demands are approximately 20 times over supply. But public money is being used to pay for the Games. Outside of $5.6 billion from a privately-funded budget, Japan is on the hook for costs such as the construction of the national stadium and athletes village.
Cost overrun is not a shock
That the Olympics are projected to go over budget is no surprise. In the modern era, host cities have built lavish stadiums and rolled out the red carpet for the world to see, but find themselves on the hook for expenses after the Games end.
The Council on Foreign Relations found that every Olympic host city since 1996 has incurred an increase in final cost compared to the original budget. Pyeongchang, South Korea, was responsible for $13 billion after hosting the 2018 Winter Olympics, about $6 billion more than projected.
The Tokyo Games, which begin July 24 and end Aug. 9, appear to be no exception.
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