The total cost for the 2020 Summer Olympic Games in Tokyo is expected to be substantially higher than the organizing committee had originally expected. The committee is estimating that the highly anticipated event will cost nearly $15 billion, which is six times greater than the original estimate.
The six-fold increase in price is the result of unplanned expenses and general underestimates in costs. The organizers will be required to construct new lanes on highways and deal with rising materials costs. They also greatly underestimated personnel expenses. As a result, the Olympic Games are expected to go well over budget, and organizers are now scrambling to find a way to handle this major problem.
Additionally, the committee also cited the higher cost of building temporary sports facilities, renting existing properties, constructing temporary infrastructure and additional security measures as other contributors to this massive funding shortfall.
The Tokyo 2020 Organizing Committee believes that it will only be able to raise slightly less than $4 billion from sponsors and the sale of tickets. This means that there will be a shortfall of a whopping $11 billion, which will be extremely difficult to overcome.
Originally, it was expected that the 2020 Summer Olympic Games would only cost around $2.5 billion. However, the organizing committee had admitted that this estimate was extremely optimistic. The costs for staging the Olympic Games will be shared by the organizing committee, the city government of Tokyo and the national Japanese government. Much of this money will come from Japanese tax dollars.
By comparison, the 2016 Summer Olympic Games in Rio de Janeiro have a budget of slightly more than $3.5 billion, while the 2012 Summer Olympic Games in London ended up costing just over $13 billion. However, these games have nothing on the 2014 Winter Olympics in Sochi, Russia, which cost about $51 billion.
The Japanese have already had a very challenging time preparing for the 2020 Olympic Games. Planners had to scrap the design of a new Olympic stadium because of cost issues. This led to the country’s sports minister resigning from his position in September.