Olympic Delegates Mull Radiation, Riots in Vote on 2020 Games

Photographer: Tomohiro Ohsumi/Bloomberg

Flags promoting Tokyo's bid for the 2020 Olympics and Paralympic Games are displayed in Tokyo. Close

Flags promoting Tokyo's bid for the 2020 Olympics and Paralympic Games are displayed in Tokyo.

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Photographer: Tomohiro Ohsumi/Bloomberg

Flags promoting Tokyo's bid for the 2020 Olympics and Paralympic Games are displayed in Tokyo.

Tokyo, Madrid and Istanbul all have to overcome significant hurdles as the cities try to win votes to host the 2020 Olympics, which may bring a boost of more than $500 million to local economies.

The finalists will make presentations to the International Olympic Committee tomorrow in Buenos Aires before about 100 IOC members decide on the host. Each city had to face questions this week about its preparations and ability to hold the summer games, which winning bidders often use to improve transport and other infrastructure.

Tokyo, the 1964 host, faced concern over radiation leaks at the Fukushima nuclear power plant, while Madrid was queried about its willingness to spend at a time when unemployment exceeds 25 percent. In the past few months, Istanbul was the site of anti-government riots and 31 Turkish athletes were suspended for doping. Still, the vote comes down to the cities’ ability to present their issues in a good light, as well as a bit of luck, said Richard Carrion, an IOC member for 23 years.

“All of that you have to take into consideration,” Carrion, a Puerto Rican who is chairman of the IOC’s finance commission and a candidate for its presidency, said in an interview. “Do you have confidence that seven years from now things will be better? It’s a very complex set of factors. You’ve got some very interesting votes here and they’re very tough to call.”

Tokyo is the favorite, according to oddschecker.com, which gathers odds from Internet betting sites. The Japanese capital is 11-10, meaning a successful bet of $10 will return $11 plus the original stake. Madrid is 11-4 and Istanbul 5-1.

Prime Ministers

Prime Ministers Shinzo Abe of Japan, Mariano Rajoy of Spain and Recep Tayyip Erdogan of Turkey will be in Argentina for the final presentations.

The finalists were selected last year after the IOC dropped the Qatari capital of Doha and Baku, Azerbaijan. An IOC evaluation commission compiled a technical assessment and report on each bid that members received in July.

Tokyo is bidding for the second straight time, while Madrid, which lost out to Rio de Janeiro in the final round of voting for the 2016 Olympics, is bidding for a third consecutive time and Istanbul a fifth time overall.

The decision should “always be what is the best for the movement, what sort of impact it would have on the city being given the games, what value add would this bring and not forgetting the enormous amount of investment,” said IOC Vice President Ng Ser Miang, a Singaporean who is also running for the presidency.

Tokyo

Tokyo has overcome a lack of public enthusiasm that doomed its bid for the 2016 games, with a March IOC poll finding support among residents at 70 percent, compared with 47 percent in May last year.

The government is billing the bid as marking Japan’s recovery from the 2011 earthquake, tsunami and nuclear disaster. Parliament passed two motions in favor of the bid and Abe told the evaluation panel in March that hosting is a long-held dream.

The Japanese city has emphasized merits such as financial stability, safety and convenience in its pitch. Tokyo put aside 408.8 billion yen ($4.1 billion) for building and upgrading facilities, including an 80,000-seat National Stadium designed by Pritzker Architecture Prize winner Zaha Hadid.

Undercutting its effort has been the Fukushima nuclear plant accident about 220 kilometers (137 miles) northeast of the city. The facility was damaged in a 2011 earthquake, and more than 300 tons of highly radioactive water had leaked from a storage tank.

Spanish Economy

Madrid’s bid comes even as Spain’s economic woes worsened since it lost out on the 2016 games. Unemployment has risen to 26 percent from 18.5 percent, and public sector debt last year increased to 84.2 percent of gross domestic product as the government backstopped municipalities, tax-funded pensions and jobless-benefit systems.

About 80 percent of Madrid’s venues are built, and organizers have cut planned spending on stadiums and infrastructure by 24 percent to $1.9 billion compared with the 2016 bid, according to Bloomberg News calculations. Organizing costs are budgeted at $3.1 billion, and would be covered by television rights, sponsorships and ticket sales, according to Juan Antonio Samaranch Jr., a Spanish member of the IOC’s 15-person executive board.

Samaranch said it would have been an “irresponsibility” not to bid again after more than 10 years of investment in infrastructure from Madrid’s two unsuccessful attempts.

Morale Boost

As well as facilities including a $220 million tennis arena, authorities spent on Madrid’s airport, ring roads and subway before the country’s economic slump began in 2008, Samaranch said. About 56 percent of Spaniards aged 25 or under are out of work, according to Eurostat.

“The games would give an extraordinary boost to the economy and morale of young people who have been suffering a lot,” Samaranch said in an Aug. 22 phone interview.

Istanbul has told the IOC it plans to spend $16.8 billion on infrastructure ahead of the 2020 Olympics, with only $1.1 billion of that set aside for projects specific to the games, bid chairman Hasan Arat said.

After four unsuccessful bids, the city is now ready to host sports’ biggest event, according to Turkey’s Prime Minister.

“Istanbul, with its increasing experience in organizing events, developing economy, geographical position and young population has the potential to organize an unmatched Olympics,” Erdogan told reporters before he left for the G-20 meeting in Russia and then to head Turkey’s Olympics delegation.

Cheating, Riots

Istanbul had to react to last month’s suspension of 31 athletes, including former Olympic silver medalist hammer-thrower Esref Apak, for two years by the Turkish Athletics Federation after they tested positive for banned substances.

Turkish soccer clubs Fenerbahce and Besiktas were also banned from European competition for match-fixing, while police and anti-government protesters clashed in Istanbul in June.

Just 10 months after Turkey achieved its first investment-grade rating in two decades, bond yields are soaring to within half a percentage point of junk-level countries including Hungary and Nigeria.

Concern that the conflict in neighboring Syria will escalate, Turkey’s growth prospects will worsen and the U.S. will curb stimulus have damped demand for the nation’s assets.

Turkey’s central bank Governor Erdem Basci said Aug. 27 that the country may need to revise its year-end economic growth forecast from 4 percent now. The current-account gap widened to $35.9 billion in the six months through June from $30 billion in the same period a year earlier. The country may exceed its projected 2013 shortfall of $60.7 billion, Economy Minister Zafer Caglayan said Aug. 27.

Voting Plan

The three cities will get one more chance to convince the IOC voters that their positives make up for any shortcomings before the final ballots. While most delegates have a plan, their support could change if their first choice is eliminated.

“You have three cities and they will start with more or less the same number of votes,” Carrion said. “I’ve made up my mind, I know how I’m going to vote. The key one is what if your first pick goes out, so you always have to talk. I have no doubt all three can do this.”

To contact the reporter on this story: Tariq Panja in Buenos Aires via the Rio de Janeiro newsroom at tpanja@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net

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