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Tokyo faces hurdles in building for 2020 Olympics

The Olympic Rings are displayed inside the Olympic Park prior to the Sochi 2014 Winter Olympics in Sochi, Russia.
Al Bello | Getty Images

Tokyo's 2020 Summer Olympics were meant to be different: compact, on budget and on time.

But now, as the Japanese capital moves to leap from bid to building a year after winning the games, the optimism is ebbing.

The National Stadium, built when Japan hosted the Olympics in 1964, symbolizes the woes. Set to be demolished two months ago for a sleek new venue, it stands empty, its seats ripped out, waiting for a deal to bring the wrecking ball.

The city won the Games over Madrid and Istanbul by emphasizing Japan's organisational strengths and $4.5 billion in the bank. The rejoicing over the victorious bid on Sept. 7 last year - Sept. 8 in Japan - coincided with a surge of optimism over Prime Minister Shinzo Abe's economic revival plans.

Abe put his personal prestige on the line with a vow to the International Olympic Committee (IOC) to put on the best Games ever.

But now, even as "Abenomics" appears to be sputtering, the Olympics face ballooning costs, angry environmentalists and a fading vision of a cosy, downtown event.

Read MoreAbenomics approaches a moment of reckoning

"With the rivals we had, and evidence of problems for the games in Sochi and Rio, there was a sense in the IOC that they wanted the Olympics held by a place that had its act together," said Hitoshi Sakai, chief executive of the Institute for Social Engineering think tank.

Instead, even demolition of the National Stadium - which half a century ago was filled with the roars of a triumphant crowd at the kindling of the Olympic flame for the 1964 Summer Games – has gone through two rounds of failed bidding.

Compact games, soaring costs

Central to Tokyo's promises was that nearly all the competition venues would be within 8 km (5 miles) of the Olympic Village.

But construction and labor costs have soared due to rebuilding after a March 11, 2011, tsunami, and a rise in consumption tax from 5 to 8 percent this April was not factored in to budgets, a Tokyo government official said.

Planners allotted $1.5 billion for venues in the bid but that estimate more than doubled late last year after re-calculations.

Budget worries may mean plans for a new basketball arena are dropped and the competition might be shunted 25 kilometers (15 miles) outside Tokyo to an existing venue, although "sustainability" is being cited as the reason.

Read MoreTokyo Olympics costs jump amid labor shortage

The yacht races may have to move some 27 kilometers (17 miles) to the east, because the original venue is within the approach zone to Haneda Airport and helicopters need to fly above the races to film them.

Any such changes require approval of international sporting federations, which may be less than pleased.

"We have always been impressed by the proposals for sailing ... in particular the compact nature of the venue and the close proximity to the other sports venues and Olympic village," Jerome Pels, chief executive of the International Sailing Federation, said in an email.

Sakai said organizers had to stick to their pledges.

"No matter how much it ends up costing, it's a public, international promise to hold a compact Olympics. Japan has to keep its promises," said Sakai.

Organizers said there is nothing to worry about.

Residents of Olympic bid city Tokyo celebrate while holding Tokyo signs after the announcement of the 2020 Summer Olympic Games host city at Komazawa Olympic Park in Tokyo, Japan.
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"Tokyo will complete its preparations to deliver a well-organised Games with plenty of time to spare," Hidetoshi Fujisawa, Tokyo 2020 executive director of communications and engagement, said in an email to Reuters.

"During the bid, the team ... prepared the best plan they could. Now, the Tokyo 2020 organizing committee is reviewing this plan with an emphasis on the operational details."

Tokyo Governor Yoichi Masuzoe told a news conference that it was not a question of distance but travel time. He also noted that Tokyo Disneyland was not in Tokyo but still bore the city's name, so out-of-town venues would be fine.

"Costs could increase by 30, 40, even 50 times. Can you persuade the voters to pay this kind of money?" he asked.

Rising costs don't always mean a disastrous Games.

Costs for London's 2012 Olympics surged to more than 9.3 billion pounds ($14.6 billion), more than three times the initial estimate, but the Games were deemed a success.

Read MoreThe naysayers are wrong: Olympics should be great for Japan

Going green, for the birds?

In Tokyo, sustainability is also a buzzword for corporations such as Panasonic, eager to showcase new technology in 2020, much of it eco-friendly.

But environmentalists fear the Games will damage rare green areas in one of the world's most crowded cities.

At highest risk is a seaside park proposed as the site of the canoe and kayak slalom. It features pine forests and a bird sanctuary where up to 50,000 migratory birds - some of them endangered - gather each year.

"They're talking about making this a real 'hospitality' Olympics," said Nobuya Lida, head of the Tokyo Wild Bird Society, referring to another mantra of the Tokyo bid.

"But how does destroying nature equal hospitality?"

The 300-meter long course would require cutting down most of the trees and having 13,000 tons of water rocketing through each second, at speeds of 2 meters a second. Rules require fresh water, which would be trucked from far inland and then released into the sea - possibly damaging the wetlands ecosystem.

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Six years of protests, petitions, and letters to the IOC may be having an impact. Masuzoe has mentioned changing the site to one nearby, and it was also discussed when IOC Vice President John Coates visited Tokyo in June.

"We're at a real turning point," Lida said.

"But the city still hasn't concretely proposed a change. So we're waiting."