The government announced on Thursday that it has approved the projected 235 billion yen ($1.6 billion) cost for constructing the venue for the 2025 World Exposition in Osaka, nearly double the organizer's initial estimate.

The cost will be split among the three parties -- the central government, the Osaka prefectural and city governments, and the business community -- with each shouldering an additional 16.7 billion yen.

The government's approval comes a day after the two other parties announced they have agreed to the construction cost estimate, which has ballooned from the original projection of 125 billion yen.

The Japan Association for the 2025 World Exposition raised the figure in December 2020 to 185 billion yen, due partly to changes in construction plans, including heat measures.

File photo taken in July 2023 shows the artificial Yumeshima island in Osaka Bay, western Japan, where the 2025 World Exposition is scheduled to be held. (Kyodo)

Industry minister Yasutoshi Nishimura and Hanako Jimi, minister for the World Expo 2025, told a press conference that inflated expenses for the venue construction are inevitable for a successful expo given soaring material and labor costs.

"We want (the expo organizer) to make sure the cost will not increase again," Nishimura said, as the public remains skeptical about having to shoulder more.

Last month, the association notified the central and local governments of the additional increase of 50 billion yen based on the weak yen and labor shortages, which have pushed up import material prices and labor costs.

While the association has estimated that soaring prices will incur an additional cost of 52.7 billion yen, the review of venue design -- part of cost reduction efforts -- allows 15.7 billion yen to be cut.

The organizer said it will earmark 13.0 billion yen for a reserve fund.

For venue security, the government is arranging to spend around 20 billion yen, with the cost initially planned to be covered mostly by ticket revenue.

But in light of the assassination of former Prime Minister Shinzo Abe last year and an explosives attack on Prime Minister Fumio Kishida in April, the state will also allocate funds for strengthened security measures.

The event, to be held from April 13 to Oct. 13, 2025, on the artificial island of Yumeshima in Osaka Bay, is set to showcase technological and cultural exhibitions by around 150 countries and regions, with visitors expected to reach around 28 million.

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