THE ASAHI SHIMBUN
August 11, 2021 at 16:39 JST
The Tokyo metropolitan government is set to enter a grueling post-Olympic competition: pressing the central government to help cover the deficit-filled tab for hosting the Summer Games during a pandemic.
The novel coronavirus not only ballooned costs to hold the Olympics while reducing revenues, but it has also hammered the finances of the metropolitan government, which says it no longer has enough money to foot the entire Olympic bill.
The decision to ban spectators from the events to prevent the spread of infections resulted in a loss of most of the 90 billion yen ($813 million) or so in ticket revenues.
Extra expenses also had to be paid for COVID-19 infection-prevention measures at the Games, including the “bubble” to separate athletes and officials from the general public.
Sources within the Tokyo Olympic organizing committee estimate several tens of billions of yen in total losses.
When Tokyo submitted its candidate file in 2013 in bidding to host the 2020 Olympics, one provision clearly stated that the metropolitan government would cover any losses incurred by the organizing committee.
But a high-ranking metropolitan government official now says that document was not legally binding.
One organizing committee source said the provision had been used several times to pressure the metropolitan government to come up with various extra funds.
A major example concerned the construction costs for temporary facilities used for the Olympics.
The organizing committee initially said it would pay for all the construction costs, but by late 2016, it asked the local governments where the facilities would be built to shoulder part of the burden.
In the end, the Tokyo metropolitan government covered all the costs, including for facilities constructed outside of the capital.
At that time, Tokyo’s fiscal condition was robust. But that all changed when the novel coronavirus started spreading around Japan.
“In normal times, the metropolitan government would have covered any losses, but we are now in an emergency situation,” a senior metropolitan government official said about the deficit from lost ticket revenues. “The decision to ban spectators was an infection-prevention measure. The entire burden cannot be shouldered by the metropolitan government.”
The metropolitan government has already doled out about 5 trillion yen for various measures to deal with the pandemic.
Its so-called savings at one time was about 900 billion yen. The figure has now shrunk to about 270 billion yen.
Another high-ranking metropolitan government official said negotiations with the central government were likely now that the metropolitan government is strapped for cash with no end in sight for the pandemic.
However, the central government indicated it may not even show up at the negotiating table.
At an Aug. 10 news conference, Tamayo Marukawa, the state minister in charge of the Tokyo Olympic and Paralympic Games, did not say if such talks would be held with the metropolitan government.
A senior Finance Ministry bureaucrat said there was no need for the central government to cover any Olympic-related loss since the metropolitan government could clearly do that on its own.
The bureaucrat said the metropolitan government was not receiving any tax grants from the central government, which meant it was a fairly well-off local government body.
Another issue that will have to be addressed is the appropriateness of the metropolitan government’s various outlays for the Olympics.
Those expenditures will extend beyond what the metropolitan government said was needed to protect athletes from the summer heat and ease traffic congestion during the event.
The metropolitan government also built six new venues for the Tokyo Games, but only one is expected to turn a post-Olympic profit from operations.
The five other venues are forecast to have a combined annual deficit of 1 billion yen, which could further expand if demand for the venues does not pick up because of the pandemic.
One high-ranking metropolitan government official said the metropolitan government is obliged to provide a thorough explanation to Tokyo residents about what they received in return for the trillions of yen spent on the Olympics held amid the novel coronavirus pandemic.
(This article was written by Rihito Karube, Yuki Okado and Daisuke Maeda.)
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