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The Japan News/Yomiuri
The Japan News/Yomiuri
Politics
Sho Mizuno and Satoshi Sugawara / Yomiuri Shimbun Staff Writers

Tussle begins over extra costs of postponed Games

Makuhari Messe in Chiba is seen in October 2017. (Credit: The Yomiuri Shimbun)

The Tokyo Games organizing committee and the International Olympic Committee agreed Monday that the opening ceremony for the postponed Tokyo Olympics will take place on July 23, 2021, The Yomiuri Shimbun has learned.

Since the Games schedule would be almost the same as before, the original plan can likely be implemented with minor changes.

However, a thorough review of preparations is inevitable, and a tug-of-war has begun between the Tokyo metropolitan government and the central government over substantial new costs, such as for securing venues, additional labor costs, and storing materials and equipment.

The cost of hosting the Games was estimated in December at 1.35 trillion yen, with the organizing committee paying 603 billion yen, the Tokyo metropolitan government 597 billion yen and the central government 150 billion yen. The organizing committee planned to secure these funds through sponsorship and ticket sales.

If there were a shortage of funds, the metropolitan government would bear the additional costs and the central government would bear any shortfall, based on pledges made when bidding for the Games.

Although the amount of extra expenses will vary depending on the length of the postponement and revenue from sponsors, sources in the metropolitan government and the organizing committee predicted it would cost several hundred billion yen.

"The postponement is a first in the history of the Olympics. The country should shoulder a reasonable burden," a senior metropolitan government source said.

However, at a press conference on Friday, Tokyo Olympic and Paralympic Minister Seiko Hashimoto said only, "I would like to see the organizing committee and the Tokyo metropolitan government discuss the matter."

Expenditures related to the postponement are likely to increase because of the cost of securing venues. Rental fees of 53 billion yen were initially expected, but now cancellation fees and new charges for bookings are predicted.

In the case of Makuhari Messe in Chiba City -- the venue for seven sports, including wrestling -- the organizing committee planned to rent the facility for about 3.5 billion yen between April and September. The Chiba prefectural government, which owns part of the facility, began discussions with the organizing committee on Friday on cancellation fees and other matters.

About 370 events take place during the same period each year, and many companies plan to use the facility in 2021.

Chiba Gov. Kensaku Morita hinted at the difficulty of rebooking, saying, "This year, we asked [prospective users] to use another venue, but next year that won't be sufficient."

The organizing committee was established six years ago with 44 members and had 3,585 members as of March 1. About 30% of the employees are contract workers, who will receive about 4.7 billion yen this fiscal year. The postponement will undoubtedly result in higher labor costs than initially planned.

The handling of materials and equipment will also be an issue. The 3-meter-tall fences that will surround the venues to help prevent terrorism will be about 100 kilometers long in total. They will be kept in warehouses.

Compensation may also be requested for the tens of thousands of hotel rooms temporarily reserved for Games officials, the about 2,000 buses for athletes, and the work of security companies who secured more than 10,000 staff.

The organizing committee had expected to earn 348 billion yen in sponsorship fees from domestic companies, including those paid by companies that sign contracts just before the Games. Deals with many companies are due to expire in December, and it is unclear whether they will extend contracts after they expire as the economic situation deteriorates due to the new coronavirus.

Read more from The Japan News at https://japannews.yomiuri.co.jp/

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