Tokyo 2020: What is the true cost of hosting the Olympic Games?

Story highlights

  • Tokyo will host the Olympic Games for the second time in 2020
  • The Japanese capital previously hosted the Summer Games in 1964
  • Tokyo was awarded the Games in 1940, they were later canceled due to World War II
  • Tokyo defeated Madrid and Istanbul in Saturday's vote in Buenos Aires

Full disclosure: I have loved watching the Olympics on television since Munich 1972 and thoroughly enjoyed being in the cities for the run-up to Torino 2006 and London 2012.

Costs be damned.

Well, not really. But those who moan and groan about the "costs" of the Olympic movement have to go a long way to convince me they are automatically bad for a city.

Tokyo is a great, safe and hopefully cost effective choice to host the 2020 Summer Games. The Japanese capital achieved a crushing victory over rivals Istanbul and Madrid in Saturday's final International Olympic Committee (IOC) vote.

Read: Tokyo to host 2020 Olympic Games

Is hosting the Olympics a bad idea?

    Just Watched

    Is hosting the Olympics a bad idea?

Is hosting the Olympics a bad idea? 01:45
PLAY VIDEO
Tokyo celebrates winning 2020 Olympics

    Just Watched

    Tokyo celebrates winning 2020 Olympics

Tokyo celebrates winning 2020 Olympics 01:59
PLAY VIDEO
Tokyo will host the 2020 Summer Olympics

    Just Watched

    Tokyo will host the 2020 Summer Olympics

Tokyo will host the 2020 Summer Olympics 01:35
PLAY VIDEO

As the Financial Times notes, the current budget projections are 0.2% of 2012 GDP. Plus, more than half of the $8 billion build-out cost projections is already set aside, the new hosts tell us.

Construction firms are getting nice juicy contracts. Architects have already been hard at work. Full-time and part-time jobs will be created.

Sure, the budget will rise. It always does. London tripled its initial budget estimates to $14 billion for the construction, security etc. and privately raised $3 billion or so to stage the games, from corporate sponsors, ticket sales and broadcasting rights.

Construction money came from taxpayers and lottery funding.

Read: Wrestling earns Olympic reprieve

In fact, once London confirmed its final budget about five years before the Games, it stuck to it. It can be done.

Now, Winter Olympics are a different proposition altogether as smaller cities have to contend with grand projects well beyond their normal needs.

Many cities have been left with expensive white elephants in far flung places. Let's hope Sochi's $10bn budget (or more) is worth the cost as the government plans to make the area a year-round resort and also the site of big sporting events like a Formula One grand prix.

And yes, you can always point to the abysmal state Montreal was left it with its stadium after 1976. It took something like 30 years to pay off.

Read: Cities vie for Olympic vote

Montreal is the proverbial exception to the rule and was the warning sign for all cities to follow. It has rightfully scared the IOC and host cities into getting it right, or face financial headaches for years to come.

Athens 2004 was also a prescription for how not to do it.

Expensive white elephants still sit idle. The last minute "Mediterranean" rush to finish off some venues and infrastructure plans inevitably lead to higher costs.

Atlanta '96 was no great success either, but for the start of the trend to plan the use of big venues, before the Games began. The Olympic Stadium was partially knocked down and used by the city's popular baseball team.

Beijing and London went in other ways -- new stadia for the opening and closing ceremonies and athletics -- with a vow to keep the spirit of the Olympics in the building's bones.

While Beijing's appears to be nothing more than a tourist attraction, London's will be home to a mix of football, athletics and already stands at the heart of a new urban park -- home to big named concerts and yes, lots of tourists.

Speaking of tourists, those who stayed from London in droves last summer, were here this summer, I can tell you. I have not suffered from London being so busy as July and August just gone.

London also got new train stations and better access to the east of the city. Sure, the poor in the area should have had that already, but now they do; along with new schools, swimming pools and housing.

Could Olympic money be "spent" in better ways? Not likely.

Governments often go over budget and over time when undertaking large infrastructure projects. The Olympics give cities one big, wonderful immoveable objective; a deadline. As Rio is now learning, there is no pressure like the pressure of IOC inspectors.