Olympic Cost Overruns

The authority in charge of Tokyo’s successful bid for the 2020 Summer Olympic Games has come under fire for vastly underestimating the cost of constructing new facilities. 

Photo: AP Photo / Koji Sasahara
Tokyo Gov. Naoki Inose, right, and Tokyo 2020 Bid Ambassador and silver medalist fencer Yuki Ota, left, acknowledge cheers during a special event to celebrate Tokyo's successful bid to host the 2020 Summer Olympics and Paralympics Sept. 10..

One critic, a professor named Tomoyuki Suzuki who was in charge of preparing Tokyo’s unsuccessful bid for the 2016 games, told a local newspaper that the 2020 bid committee knew its estimates were way too low and is now sneakily trying to nudge the estimates up without anyone noticing.

The main culprit is the new national stadium. Originally, the estimate was 300 billion yen ($2.9 billion), but mysteriously this figure was decreased to 169 billion just before the final bidding with a sufficient explanation.

As Suzuki admits, construction costs for public facilities always end up rising over time, but neither the bid organization nor the Japan Olympic Committee has ever explained that bit of conventional wisdom to the public.

The estimate was simply based on a number “that was most likely to be accepted.” However, the biggest subterfuge was the estimated revenues the stadium would pull in after the Olympics.

The JOC predicts the new national stadium will show a surplus of 400 million yen per year but, as Suzuki points out, this projection is based on the belief that the stadium will host 12 major concerts a year.

That, he says, is impossible, unless the stadium foregoes sporting events, which is what it’s being built for in the first place.

The main problem with using stadiums for concerts, especially stadiums that hold field events like soccer, is that concerts destroy the natural grass on the playing field. Suzuki cites Ajinomoto Stadium in Western Tokyo, which is the home field of the FC Tokyo professional soccer team.

In 2008, the stadium operators rented the facility to a rock promoter who staged a concert attended by almost 80,000 people.

Despite FC Tokyo’s protests, the concert went ahead. Afterward, the stadium had to spend “tens of millions of yen” to change the grass on the entire field in time for an FC Tokyo match.

Japan has many stadiums with seating capacity beyond 50,000, and it’s impossible to utilize them to their fullest with only sporting events, so major concerts are a natural solution. But operators have found that the maintenance costs are too high and so several have implemented no-concert policies.

If the stadium is run by a local government, it ends up subsidizing the venue.

Tokyo’s is richer than most, but Suzuki thinks that the 400 million yen surplus estimate indicates it doesn’t want to reveal just how much money the stadium will lose once the Olympics are over.

Quizzed by the newspaper Tokyo Shimbun, the Tokyo Metropolitan Government said concerts are “not a big problem for grass” and left it at that.