Officials estimate 2020 Olympics to cost $16.9 billion

The latest price tag for the 2020 Tokyo Olympics has been trimmed slightly, but is still nearly twice the initial estimate even after a major cost-cutting effort.

The organizers said today that the event will cost a total 1.35 trillion yen (NZ$16.9 billion).

In their release, Tokyo 2020 officials said the cost would be $17.95 billion. But at the current exchange rate of about 113 yen to the dollar it is just under $17.1 billion.

When Tokyo won the Olympics in September 2013, its bid was for 730 billion yen. That ballooned to over 3 trillion yen but was slashed to 1.4 trillion yen after Tokyo Gov. Yuriko Koike launched a cost cutting campaign.

Organizers have managed to cut still more from the estimated cost by moving some events outside of Tokyo and using existing and temporary facilities.

Tokyo's games won't be the priciest ever: the 2012 London Olympics cost $27 billion, compared with the bid estimate of $9.2 billion.

Cities tend to exclude large amounts of associated costs when they submit a bid to host the Olympics. Such bids usually include only core components such as the main facilities so that the bids are easier to compare. Building design, security measures, transportation and other costs are largely excluded.

Thomas Bach, who took over as IOC president in 2013, has sought to slash costs to entice cities to bid for future Games and minimize damage to the Olympic brand. The IOC has urged Tokyo to cut $1.42 billion more.

The addition of five new sports after Tokyo pushed the tab up, but one of the biggest factors is rising construction costs.

The budget figure announced today does not include a contingency fund of between 100 billion-300 billion yen ($1.2 billion-$3.7 billion).

A cost-allocation agreement calls for the city of Tokyo and the Tokyo 2020 organizing committee to pay 600 billion yen ($7.7 billion) each. The central government will contribute 150 billion yen ($1.9 billion).

The remaining 35 billion yen ($450 million) will be covered by lottery revenues, officials said.

July 23, 2016 file photo, a representation of the Olympic rings are displayed in the Olympic Village in Rio de Janeiro, Brazil. Athletes increasingly are using apps like Tinder as they look to have fun and escape the pressures of competition inside the Olympic Village. (AP Photo/Leo Correa, File)
Olympic rings displayed in Olympic Village in Rio de Janeiro, Brazil. Source: Associated Press