Tokyo Olympics seeks cuts, with costs pegged at $17.4-$20B

TOKYO — Organizers of the Tokyo Olympics estimate the total cost of hosting the 2020 Games will be between 1.6 and 1.8 trillion yen ($17.4-$20 billion).

The official cost estimate announced Wednesday was below the promised two trillion ($22.7-billion) cap, while organizers said they will try to come down further.

“This is Version 1,” said Toshiro Muto, chief executive of the organizing committee. “We will continue our cost-cutting effort toward our Version 2.”

Details of cost-sharing among the three parties — the organizing committee, Tokyo and central governments — can be now worked out, Muto said.

The cost estimate includes 590 billion yen ($7.3 billion) to build permanent and temporary venues and other facilities, and 410 billion yen ($5.09 billion) for transportation, security and other operational expenses. It takes into account 500 billion yen ($6.3 billion) of revenue from sponsorship, ticket sales, licensing and IOC contributions.

It also calls for a budget of 100300 billion yen ($1.34-$3.7 billion) to cover “contingency” costs such as anti-heat measures that may be needed to cope with hot weather.

International Olympic Committee vice-president John Coates had criticized the $22.7-billion cap as too high. Coates, via a video conference link from Australia, joined chief organizer Yoshiro Mori, Tokyo Gov. Yuriko Koike and Olympic Minister Tamayo Marukawa for Wednesday’s announcement.

Coates praised their effort and said he was “very, very pleased” with the outcome, which is a substantial reduction from an earlier prediction. Coates said he planned to continue working in the four-party framework to make more savings.

Tokyo’s Olympic costs have soared amid Japan’s reconstruction from the earthquake and tsunami in 2011, the year the city launched its bid for the Games. Tokyo secured the Games in 2013.

A Tokyo government panel has warned the eventual total cost could exceed $40 billion — four times the initial estimate — without drastic cuts. The outspoken governor, Koike, has spearheaded a cost-cutting effort.

The IOC is facing pressure to reduce costs to entice cities to bid for future Games. The $68.5-billion price tag of the 2014 Winter Games in Sochi, Russia led numerous cities to drop out of bidding for the 2022 and 2024 Olympics.