The 2020 Tokyo Olympics and Paralympics were postponed to 2021 due to the coronavirus pandemic and the alterations needed to be made due to COVID-19 are not cheap. According to the local organizing committee when revealing the Olympic budget on Tuesday, the official cost of the event is up by 22%. This brings the cost from $12.6 billion to $15.4 billion.
Negotiating contracts and other necessary changes caused by the pandemic added the $2.8 billion.
"The Tokyo Olympics are operating in a very tough environment," CEO of the organizing committee Toshiro Muto said, adding that they should be looked at as an investment.
The Japanese government must cover all costs besides $6.7 billion in a privately funded operating budget.
A study done by the University of Oxford notes this as the most expensive summer Olympics ever recorded.
In 2013, when Tokyo was given the games by the IOC, they country said it would cost around $7.5 billion. Audits by the Japanese government are now showing the costs at minimum $25 billion.
"The IOC and TOCOG [Tokyo organizing committee] want the public budget to appear as small as possible not only to guard against public criticism, but also to not discourage future candidate cities," Franz Waldenberger, director of the German Institute for Japanese Studies in Tokyo, said.
Cuts have previously been made, but increases to other areas such as the opening and closing ceremonies are keeping the cost high.
While Japan has handled the virus well, there is still the question of fans, as many would be traveling. Limited fan attendance would also impact the money coming in, as ticket sales are a main source of income for the games.
Organizers are attempting to find ways to increase revenue, but do not plan on asking the IOC for more funds, according
to organizing committee chief financial officer Gakuji Ito.
The Olympics are to open on July 23 and the Paralympics are set to open on Aug. 24.
They have said in the past if the Olympics do not go on in the summer of 2021 as is the plan now, they will be canceled.