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September 16, 2020

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Tokyo, IOC dismiss costs report

The chief executive officer of the Tokyo Olympics and the IOC member in charge of Japan’s Games have dismissed a new study from the University of Oxford that finds Tokyo is the most expensive Summer Games since 1960.

Tokyo, postponed to 2021 because of the coronavirus pandemic, is only a small part of economist Bent Flyvbjerg’s study which was published yesterday and titled, “Regression to the Tail: Why the Olympics Blow Up.”

The analysis in the journal “Environment and Planning A: Economy and Space” — the third in a series following editions 2012 and 2016 — looks at Olympic costs and finds they keep increasing despite claims by the International Olympic Committee that costs are being cut.

Cost overruns for the Olympics have averaged 170 percent, and Flyvbjerg says Tokyo is over 200 percent.

“Well, I am aware of the report in the media. But there was no official statement given to the Tokyo organizing committee,” Tokyo CEO Toshiro Muto said yesterday in an online news conference. “So I am not in a position to make any comment on that. I am just simply confused.”

IOC Vice President John Coates, who oversees planning for Tokyo, also brushed aside the Oxford study.

“I’ve taken the view that I’ve got more productive things to do with my time than to analyze that report and respond to it,” Coates told the Australian Financial Review newspaper yesterday.

Flyvbjerg got a similar response from the IOC when the report came out unofficially a few days ago. The IOC criticized his work, questioned the numbers and methodology. In response, Flyvbjerg sent an open letter to IOC President Thomas Bach, offering details.

Flyvbjerg said yesterday the IOC had not replied. On Monday, the IOC said it would have no further comment.

According to the Oxford numbers, Tokyo’s spending is at US$15.84 billion, already surpassing the 2012 London Olympics, which were the most expensive Summer Games to date at US$14.95 billion. Flyvbjerg says the meter is still running and expects several billion more to be added to the cost.

Tokyo organizers say officially they are spending US$12.6 billion. However, a national auditor says the actual costs are twice that high, made up of some expenses that the Oxford study omits because they are not constant between different Olympics.

“The Olympics offer the highest level of risk a city can take on,” Flyvbjerg said in an interview this month. “The trend cannot continue. No city will want to do this because it’s just too expensive, putting themselves into a debt that most cities cannot afford.”

Flyvbjerg says the basic problem is the IOC does not pay for most of the Olympics, or the cost overruns. He suggested the IOC should pay at least 10 percent or cost overruns, and probably much more.


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