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Editorial: Cost of hosting the Tokyo Olympics exploded, and the people deserve to know why

Now that the Tokyo Olympics are over, the biggest post-extravaganza headache is shaping up to be the Games' finances. With extra costs incurred to delay the event for a year, and a significant drop in expected income from ticket sales as spectators were barred from most venues, the organizing committee cannot avoid going into the red.

    The budget for the Tokyo Organising Committee of the Olympic and Paralympic Games reached 721 billion yen (approx. $6.53 billion) after 103 billion yen ($932.8 million) was added to cover the Games' delay due to the pandemic. Of this, a large chunk of the 90 billion yen ($815.1 million) in expected ticket revenue was lost.

    Tokyo's Olympic host bid file delivered to the International Olympic Committee (IOC) in 2013 stated that in the event the organizing committee fell short of funds, the Tokyo Metropolitan Government would step in to help. And if this proved insufficient, the Japanese government would provide funds. The IOC is under no contractual obligation to back up the organizing committee's operating losses on the Games.

    And so, it is up to the people of Tokyo and Japan to make up the yawning shortfall. However, the latest Olympics were held under the extraordinary circumstances of the coronavirus pandemic. If the Tokyo organizing committee indeed confirms a loss, there should be debate including the IOC on how best to divide the financial burden.

    The cost of hosting the Games has swelled ever since Tokyo was picked to host the event. At first, the organizing committee, the Tokyo government, and the Japanese government were expecting to shell out a total of 734 billion yen (about $6.65 billion) to hold the Olympics. But by December last year, that had ballooned to an announced budget of 1.644 trillion yen ($14.89 billion). Add in "Games-related expenses" such as road improvements, and the total will likely top 3 trillion yen.

    Tokyo's bid promised a "compact Olympics," and the plans for the tournament envisioned 85% of event venues being concentrated within an 8-kilometer radius of the Olympic Village. But as projected venue construction costs mounted, these plans shifted. Ultimately, the events were held across 10 prefectures, which generated its own costs. This suggests the initial plans were sloppily conceived.

    Another major issue is how the venues will be used after the Paralympics' close in September. This was viewed over-optimistically as well, and there is a serious risk that they will become the Games' "negative legacy," or white elephants.

    For one thing, the post-Games management of Japan's National Stadium -- entirely rebuilt for the Olympics and Paralympics -- remains undecided. And the facility will cost an estimated 2.4 billion yen per year (about $21.7 million) just to maintain. The same problem goes for the venues the metropolitan government prepared in the capital's waterfront district. Of six facilities, only the Ariake Arena -- which hosted the volleyball competitions and can also be used as a concert venue -- can be expected to run in the black.

    The organizing committee, the Tokyo government and the national government need to examine why Olympic expenses swelled to this degree, and explain the process to the public. The bill cannot be foisted cheaply on the Japanese people.

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