Tokyo 2020 unveils US$1.4 billion budget cut

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Tokyo 2020 organizers unveiled a "significant" cut in their budget for hosting the games on Friday, as the city comes under pressure to keep a lid on spiraling costs.

The overall games budget now stands at a total of 1.35 trillion yen (12.6 billion US dollars), organizers said in a statement.

This represented a cut of 1.4 billion US dollars compared to the previous version of the budget unveiled last December and 0.3 billion US dollars compared to an interim figure agreed in May.

"Going forward, Tokyo 2020 will continue to seek further cost reductions, particularly in the areas of event operations, transport, accommodation and security," organizers said in a statement.

They hailed a "significant reduction in costs" resulting from "sustained efforts [...] to avoid recourse to public funds."

Hidemasa Nakamura, chief financial officer of the Tokyo 2020 Games, speaks on the updated version of the Games budget during a press conference in Tokyo Friday. /AP Photo

"This will not be the end of the cost reduction efforts," vowed Hidemasa Nakamura, chief financial officer of the Tokyo 2020 organizing committee.

Cities tend to exclude large amounts of associated costs when they submit a bid to host the Olympics. Such bids usually include only core components such as the main facilities so that the bids are easier to compare. Building design, security measures, transportation and other costs are largely excluded.

Thomas Bach, who took over as IOC president in 2013, has sought to slash costs to entice cities to bid for future Games and minimize damage to the Olympic brand. The IOC's Games coordination commission chairman John Coates said in October that Tokyo should aim to cut overall costs by 1 billion US dollars from the interim figure.

Tokyo 2020 organizers have unveiled a "significant" cut in their budget for hosting the games. /AFP Photo

The addition of five new sports pushed the tab up, but one of the biggest factors is rising construction costs.

A cost-allocation agreement calls for the city of Tokyo and the Tokyo 2020 organizing committee to pay 600 billion yen (5.4 billion US dollars) each. The central government will contribute 150 billion yen (1.4 billion US dollars).

The remaining 35 billion yen (315 million US dollars) will be covered by lottery revenues, officials said.

Organizers have managed to cut still more from the estimated cost by moving some events outside of Tokyo and using existing and temporary facilities.

"We hope to draft [budget] plans so that Coates will say 'good job' at the end," Nakamura said.

Source(s): AP ,AFP