Budget nightmare for Tokyo Olympics stadium due to unconventional design

Artist image showing the new National Stadium in Tokyo.

The design plan for the new National Stadium, the main venue of the 2020 Tokyo Olympics and Paralympics, is still under review. The unconventional and nonstandard design makes it impossible to keep the construction cost within a predictable budget.

After making several reviews of the project, general contractors involved estimated that it would cost more than ¥300 billion (S$3,255 million) in total. While negotiations to curtail the cost between the organizers and the contractors are in the final stage, why has the project strayed so far off course?

Illusory ¥130 billion 

"The more it's discussed, the more it overshadows the preparation for the Tokyo Games," International Olympic Committee President Thomas Bach said at an IOC board meeting in Lausanne, Switzerland, on June 8. Bach made this unusual remark out of concern about the confusion over the main venue for the Tokyo Games.

The national project, attracting attention worldwide, is led mainly by the Japan Sport Council (JSC), which is under the jurisdiction of the Education, Culture, Sports, Science and Technology Ministry.

The JSC held an international design competition for the stadium in July 2012, in which it set a condition that total construction cost should be ¥130 billion. According to informed sources, the competition was aimed at making an appeal to the world with an eye on a bid for the Olympic Games.

A rough indication of the construction cost was the 70,000-capacity Nissan Stadium in Yokohama that was completed at a total cost of ¥60 billion, the sources said.

Aiming to build an 80,000-capacity arena, the JSC calculated the construction cost by simply adding costs for the installation of 10,000 more seats, a retractable roof and other equipment, so it was a significantly rough estimate, the sources said.

In November 2012, a design proposed by Iraqi-born architect Zaha Hadid won the competition. The judging committee chaired by architect Tadao Ando praised the design, saying it "promises to powerfully express to the world the innovative spirit of the nation." However, the design was perhaps too innovative and has led to confusion.

¥162.5 bil. as a compromise

In October 2013, just after Tokyo won the bid for hosting the 2020 Olympic Games, Hakubun Shimomura, the sports minister, said in the Diet in response to a question about the total cost of the stadium that it would cost ¥300 billion if it was constructed based on the plan.

The JSC gave up on the original plan, and announced in May last year the current plan, scaling down the original proposal and making the design simpler, with a total construction cost estimated at ¥162.5 billion.

However, the amount was still too massive compared to ¥61 billion for a main venue for the 2012 London Games and other costs for facilities of this kind, promoting criticism within the government and the ruling parties.

According to a source close to the government, the JSC reduced the cost by assuming the cheapest materials produced overseas would be used. "The figure was a product of compromise to avoid criticism," the source said.

Shocking 'more than ¥300 bil.'

This spring, two general contractors chosen to construct the stadium submitted to the JSC their estimate of more than ¥300 billion, far beyond the JSC's imagination.

The major factor of the amount is a special structure to insert two massive arches into a streamlined roof. The arches would be about 370 meters long each and weigh about 20,000 tons in total.

It is reportedly an unusual structure to be used for constructing a large-scale building. It requires great labour to transport such huge construction parts, while it is extremely difficult to assemble them on site. "We have to individually build each of the arches and mistakes would not be tolerated. So a cost increase is unavoidable," general contractors said.

The ministry and others have been proposing bare-knuckled measures to reduce the construction cost and shorten the construction period, such as delaying the installation of the retractable roof and replacing 15,000 movable seats with temporary and removable seats.

Furthermore, they have been negotiating with the general contractors to reduce the total cost to around ¥250 billion.

"The budget going up and down in a public purchase is unthinkable. The current situation is caused by the government and the JSC proceeding with the project without clearly deciding which body is in charge, so there is no surprise if they are accused for lacking clear prospects," said Hiroshi Arikawa, professor of public policies at Nihon University and former senior official of the Board of Audit.