Tokyo Olympics: no one wants to pay the bill as postponement inflates costs

By Antonio Hermosín Gandul

Tokyo, Apr 23 (efe-epa).- A row between the International Olympic Committee and the organizing committee of the Tokyo 2020 Olympic Games earlier this week has raised serious questions over the rising costs of the mega-event, now postponed to summer 2021, and who will foot the bill.

Determining the economic impact of the postponement is one of the major tasks that the organizers are facing, apart from a number of other concerns.

Tokyo 2020 CEO Toshiro Muto said in a televised press conference on Thursday that the costs of the delay had to first be evaluated before deciding how to tackle them.

Although various estimates have been made about the derived costs of postponing the Games, the final amount would depend on variables such as availability of the sports venues which had been reserved exclusively for the summer of 2020 and what happens with the Olympic Village, which was supposed to be turned into a residential complex after this summer.

Calculations have suggested that it might cost around 300 billion yen ($2.9 billion) to maintain for another year the facilities especially constructed for the Olympics and reorganize the approximately 46,000 hotel bookings for officials invited to the Games.

The Japanese government could suffer additional losses worth 220 billion due to the postponement in business opportunities lost by not holding the event at the stipulated time, according to a study by economist Katsuhiro Miyamoto, a professor emeritus at the Kansai University.

The organizers have not released a figure so far and said that they were studying the additional expenses, while IOC President Thomas Bach has said the additional cost might run into “hundreds of millions of dollars.”

The latest budget for Tokyo 2020, approved before the schedule had to be changed due to the crisis caused by the COVID-19 pandemic, had climbed to 1.35 trillion yen, mainly funded by Japanese public sector funds and private contributions, with a small part coming from the IOC.

According to the Japanese version of events, in mid-March the IOC agreed to postpone the Olympics by exactly an year at the request of Japanese Prime Minister Shinzo Abe and both sides left hanging the thorny issue of how to divide the costs of the delay.

Therefore the organizing committee expressed its discomfort when on Monday the IOC published an article on its website which said Abe had “agreed that Japan will continue to cover the costs it would have done under the terms of the existing agreement for 2020.”

After the organizers protested, the sports body based in Lausanne, Switzerland deleted the controversial comment attributed to Abe from its website and said both Japan and the IOC would “continue to assess and discuss jointly the respective impacts caused by the postponement.”

Although this might have been explained as a simple misunderstanding, the sharp reaction of the organizers and the Japanese government – which also denied that Abe had committed to bearing additional costs – show that this is a delicate issue, especially for the Japanese side.

During the last coordination meeting held in Tokyo in mid-April, IOC representative John Coates had made it appear that his organization was not contemplating contributing to the additional costs, although it would help the national committees and sports federations affected by the drop in income and cancellation of competitions.

Coats had also urged the organizers to cut the budget as much as possible and give up “unnecessary” facilities such as venues for public screening of the Games and reduce the cost of the hospitality offered to the national committees, media and patrons.

The contract signed by Tokyo in 2013 as the Olympic host stipulates that Japan would bear the organizational costs, an obligation which is theoretically still applicable as it was the Japanese government which officially proposed the change of dates, unless the two sides agree to a different distribution of expenses.

However, as this is an exceptional situation, Japanese authorities were confident that the IOC would also play a role in dealing with the expenses, Tokyo Governor Yuriko Koike told reporters.

No matter what the final bill amounts to, the postponement is set to become another massive financial headache for the Abe government, which recently approved the biggest economic stimulus package in the history of the country to try and mitigate the effects of the recession caused by the coronavirus crisis. EFE-EPA


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