Photo/Illutration An artist’s rendition of the site for the 2025 Osaka Kansai Expo (Provided by the Japan Association for the 2025 World Exposition)

OSAKA—Osaka Governor Hirofumi Yoshimura apologized to taxpayers for the ballooning price tag of the 2025 Osaka Kansai Expo caused by soaring costs for materials and the weakened yen.

Yoshimura said at a prefectural assembly meeting on Oct. 21 that an extra 4.1 billion yen ($27.7 million) is needed to construct the main “Osaka Healthcare Pavilion” for the event.

“We are asking people in Osaka Prefecture and residents of the city of Osaka to take on an additional burden, and I am taking that very seriously,” the governor said.

Construction costs for the expo are being covered mainly by the governments of Osaka Prefecture and Osaka city.

The new cost for the pavilion--11.5 billion yen--is about 1.5 times the initial estimate of 7.4 billion yen.

Yoshimura said officials have tried their best to reduce costs.

In September, Takenaka Corp., which won the bid for the pavilion project, said in its proposal that construction costs would be 19.5 billion yen.

The Osaka prefectural and city governments reduced that amount to 11.5 billion yen by, for example, using transparent membranes instead of glass for the pavilion’s roof.

A supplementary budget for the expo has been submitted to both assemblies.

The prefectural and city governments are expected to go halves on 11.1 billion yen of the pavilion costs. The remaining 400 million yen will be covered by support money provided by private businesses.

According to the Tokyo-based Economic Research Association, the construction cost price index in Osaka was 165.6 in September, compared with 100.0 in fiscal 2015.

The prices of cement and steel stocks used in pillars and other structures have been soaring this year.

Total expenses to build the entire venue for the expo will be covered equally by three entities: the central government, the Osaka prefectural and municipal governments, and private businesses.

In December 2020, it was revealed that the total construction cost would be 185 billion yen, about 1.5 times the initial estimate. At that time, the yen-dollar rate was in the range of 103-104 yen.

But the Japanese currency has sharply depreciated this year, recently slipping to 150 yen to the dollar.

The Japan Association for the 2025 World Exposition, operator of the event, said it hopes to keep the costs within 185 billion yen.

But a person related to a company that is constructing facilities for the expo said, “We are short of labor, too, so there are no factors we can use to reduce costs.”

Full-fledged construction of expo facilities is expected in fiscal 2023.

At least 142 countries and regions, as well as eight international organizations, are expected to participate in the expo.

The first international meeting for these participants opened on Oct. 25.

(This article was written by Daisuke Matsuoka, Itsuki Soeda and Shinji Hakotani.)

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