Tokyo Games to cost $13B

Photo: The Canadian Press

Tokyo Gov. Yuriko Koike greets Tokyo Olympics Organizing Committee President Yoshiko Mori.

Organizers of the Tokyo Olympics estimate the total cost of hosting the 2020 Games will be between 1.6 and 1.8 trillion yen ($13-$15 billion).

The official cost estimate announced Wednesday was below the promised 2 trillion ($17 billion) cap, while organizers said they will try to come down further.

"This is Version 1," said Toshiro Muto, chief executive officer 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 ($5.5 billion) to build permanent and temporary venues and other facilities, and 410 billion yen ($3.8 billion) for "soft" costs such as transportation, security and other operational expenses. It takes into account 500 billion yen ($4.7 billion) of revenue from sponsorship, ticket sales, licensing and IOC contributions.

It also calls for a backup budget of 100-300 billion yen ($1-$2.8 billion) to cover "contingency" costs such as possible anti-heat measures that may be needed to cope with Tokyo's hot weather, officials said.

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. The trend in the construction industry is expected to continue until the Games, officials said.

A Tokyo government panel has warned the eventual total cost could exceed $30 billion — four times the initial estimate — without drastic cuts. The outspoken governor, Koike, has spearheaded a cost-cutting effort, proposing a review of three costly venues.