PyeongChang 2018 details surplus, Tokyo 2020 battles rising costs

The PyeongChang 2018 Organising Committee (POCOG) for this year’s Winter Olympic Games has reported a surplus of at least $55m (£42.1m/€47.9m) amid renewed reports of escalating costs for the 2022 Summer Games in Tokyo.

POCOG president Lee Hee-Beom yesterday (Monday) made his final report on the 2018 Games, which took place in South Korea from February 9-25, to the International Olympic Committee (IOC Session in Buenos Aires, Argentina.

Lee had previously stated that this year’s edition of the Winter Olympics returned a multi-million dollar surplus, noting that the achievement marked a substantial turnaround from the substantial deficit he inherited when being appointed POCOG president in May 2016.

While there remains concerns over legacy plans for certain PyeongChang 2018 venues, the IOC said POCOG represents another example of Organising Committees breaking even or creating a surplus that can be used for the development of sport in the host nation. The IOC said its ability to create a surplus was assisted by the implementation of Olympic Agenda 2020, the package of reforms driven by IOC president Thomas Bach, and the philosophy behind its New Norm.

Despite the fact that POCOG was already well into its preparations when Olympic Agenda 2020 was approved, the IOC said Korean organisers were able to benefit from cost-reducing or revenue-increasing measures such as the Olympic Information Service, the first turnkey solution delivered by the IOC to a Games organiser; 30,000 accredited seats being given back for public sale; no secondary mountain International Broadcast Centre (IBC), a 30 per cent smaller IBC; and a Main Press Centre that was moved to an existing structure.

Any surplus from the organisation of the Games is normally divided between the IOC, the Organising Committee and the host National Olympic Committee for the benefit of sport and the Olympic Movement. Bach yesterday said that in recognition of POCOG’s “great achievements” the IOC will contribute its share of the surplus for the benefit of sport in Korea.

Meanwhile, Tokyo 2020 CEO Toshiro Muto and IOC Coordination Commission chair John Coates yesterday detailed how Olympic Agenda 2020/New Norm has now allowed Tokyo 2020 and its delivery partners to save $4.3bn. The exact makeup of these savings is unclear, but the two parties have said $2.2bn has been saved during the review of the venue masterplan and an additional $2.1bn since the introduction of the New Norm at the IOC Session in PyeongChang earlier this year.

The IOC and Tokyo 2020 have been seeking to cut costs ever since the Games budget increased significantly following the awarding of the event in 2013. In December, Tokyo 2020 revealed a Y150bn (£1.02bn/€1.16bn/$1.33bn) reduction in its budget. The release of the second edition of the official budget came a year after Tokyo 2020 formally confirmed its budget plans for the first time, with a third version due by the end of the year.

The updated overall Games budget totalled Y1.35tn in December, a reduction of Y150bn compared to version one, and Y35bn less than the interim figure indicated in the ‘Overall Division of Roles and Allocation of Costs’ agreement reached in May between Tokyo 2020, the Tokyo Metropolitan Government (TMG), the Japanese Government and local governments of cities and prefectures hosting events.

Muto said yesterday that savings were being made by staging shorter test events, as well as reducing lease periods and construction costs. “Construction has been reduced, lease periods have been reduced, test event savings and several other items which include energy, power, telecommunications, basic facility construction which was costly but through negotiations… the specifications have been readjusted,” he added, according to the Reuters news agency.

However, the Associated Press news agency today cited a report issued by the Japanese government as evidence of a near four-fold increase in the budget, compared to the original plan in 2013, with this likely to rise further.

The Board of Audit said the national government’s share of spending had increased to Y801bn from the Y147bn estimated back in December. This brings total spending on the Games to Y2.81tn, however local organisers have again disputed what should classed as Olympic costs.

Spokesman Masa Takaya told the AP that expenditures listed such as “inbound tourism, road constructions, subsidy for creating a hydrogen society, and even improving accuracy of weather forecasts with better satellites,” should not be considered Olympic expenses.

Image: Steven Williams