Osaka integrated resort costs blow out as Tokyo firms as an option
Japan’s integrated resorts industry still faces plenty of questions, with Tokyo exploring its potential of throwing its hat in the ring after rising costs in nearby Osaka are causing concern.
Tokyo has always received a lot of support as an ideal candidate to host an integrated resort in Japan.
The city already receives significant international travel and as the country’s capital, wouldn’t have much difficulty finding approval.
Although no serious discussions have resulted in a firm commitment of interest, that could change.
The Tokyo Bureau of Port and Harbour will receive $87,000 to explore the city’s integrated resort potential.
The money is coming out of Tokyo’s fiscal year 2022 budget.
Japan’s ruling Liberal Democratic Party, aligned with the smaller but prominent Komeito Party, can help direct Tokyo’s involvement.
Tokyo’s governor, Yuriko Koike, also supports the idea of an integrated resort coming to the area.
The government hasn’t indicated if it would try to add its name in the first round of integrated resort approvals.
The deadline for all projects to be considered is the end of this April.
However, technically, those cities or prefectures that wanted it had to confirm their interest almost four months ago.
Still, the LDP controls the Japanese Diet, as well as Tokyo.
It’s possible it could decide to bend the rules if necessary.
Costs of Osaka integrated resort increase amid soil concerns
When MGM Resorts and Orix, the winners of Osaka’s integrated resort content, first presented their plan, the cost was going to be around $9.1 billion.
It wasn’t too long before the amount jumped to $10 billion.
If the private casino partners are responsible for all of the costs and can show they have the financial stability to cover them, there wouldn’t be any issues.
However, last December, Osaka revealed that it was going to have to spend $691 million for the project.
That money is only to ensure the ground under the integrated resort is safe.
Yumeshima Island, an artificial island on Osaka Bay, is the target for the resort.
However, there is contamination in the soil that includes arsenic, fluorine and other elements.
There is also a concern that the soil can liquefy.
In addition, if the soil is bad under the integrated resort, that means other areas that will see an increase in development for tourism could be bad.
The Osaka City Council is aware of the potential issue and is ready to spend more money as needed to correct any issues.
It was reported the government estimates it will need to spend US$679 million more to correct any issues.
The expense is on top of the $691 million the original plan allocated for the cleanup.
If the costs are skyrocketing now, they could go even higher once the project is underway.
The Innovation Party, which controls the majority of the city council in Osaka, doesn’t feel a referendum is needed.
However, a proposal for the referendum is coming when the council holds its regular meeting in late February.
The Osaka government hopes to have its integrated resort project ready to present to the Japanese Diet next month, at least a month before the April 28 deadline.
