Tokyo looks for cost-cutting changes, as estimated Olympic bill soars

After a panel of experts estimated the costs of hosting the 2020 summer Olympics in Tokyo at $30 billion, officials are searching for ways to mitigate expenses. 

Shizuo Kambayashi/ AP
Tokyo Gov. Yuriko Koike, standing, speaks during an expert panel at the Tokyo Metropolitan government office, Sept. 29.

Japanese Olympic organizers are the latest officials to second-guess the practicality of hosting the Olympic Games.

A panel of Japanese experts appointed by Tokyo's new governor, Yuriko Koike, found that hosting the 2020 Summer Olympics could cost Japan up to $30 billion dollars, a major blow for locals. Organizers are now looking for cost-cutting measures to lessen the burden.

"We cannot impose the negative legacy onto the Tokyo residents," said Governor Koike.

Tokyo won its 2020 Olympic bid in 2013. Since then, however, the estimated cost of the games has multiplied more than fourfold, an increase that the expert panel who reviewed potential costs say is due to poor leadership and cost control.

Koike and others are concerned that Japan’s aging population and negative population growth rate make it impractical to engage in massive construction projects for the Games, as it is unlikely that facilities constructed for the 2020 Olympics will be fully utilized by area residents.

Organizers have already slashed the projected cost of hosting the games by about $1 billion. Now, organizers are examining their options for further savings, and preparing to discuss possible changes with International Olympic Committee officials during a visit within the next few weeks.

Already, basketball, taekwondo, and cycling will take place outside of the city, as officials seek to maximize the utility of existing facilities. This week's report also suggested moving canoeing and rowing competitions about 250 miles outside Tokyo, instead of building brand new facilities within city limits. Recent cost estimates for building the facilities within Tokyo hit $490 million, seven times higher than initial estimates. The report also proposed finding alternate locations for swimming and volleyball competitions.

Part of the appeal of Tokyo's winning bid was its central design, however, as it originally had only three events scheduled more than five miles from the Olympic village.

Some of the contributing factors to the skyrocketing cost include the use of unnecessarily high grade equipment, and overestimating how much seating will be needed. For example, the swimming facility currently planned could seat 20,000, but only 12,000 are required. Critics blame poor leadership.

Tokyo is not alone in its surprise at the real costs of hosting the Olympics, particularly after the 2014 Sochi Games made headlines for their $51 billion price tag.

Several world cities have bowed out of hosting bids in recent years. Earlier this month, Roman mayor Virginia Raggi refused to give her blessing to Rome’s 2024 summer Olympic bid, citing concerns about debt and creating “white elephant” venues that would be little-used after the Games.

"Boston, Hamburg, and Madrid all had strong reasons to oppose hosting the Games. As Rome's mayor I believe this bid is unsustainable," said Ms. Raggi. "We don't need more white elephants. We need to restore the existing facilities, make the entry prices affordable to our citizens."

This report includes material from Reuters and the Associated Press.

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