Cost Overruns: What a Surprise

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The sun rises every morning. And there are cost overruns at every Olympics.

Yes, people are shocked at the JPYY252 billion (USD2 billion) budget estimate declared upon presentation of the blueprint of the new National Stadium. This is a 55% increase over an earlier estimate.

But the truth is, national olympic committees know they need to provide lower overall cost estimates to win a bid, with the unspoken understanding that costs will be higher, often significantly. In the case of the new national stadium, dubbed somewhat unceremoniously as the “bicycle helmet”, the roof’s arches are of such a complicated design that its construction alone accounts for JPY76.5 billion (USD620 million) or 30% of the entire budget.

What’s even more interesting, according to this Japan Times article, is that the Japan Sports Council, an advisory panel within the Education Ministry is the owner of the stadium construction project, and not necessarily in synch with leaders of that Ministry.

Then again, politics as usual.

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