Japan looking to allocate more than 1 trillion yen for reconstruction
Overnight reports from the Nikkei indicate that the government and ruling Democratic Party of Japan are looking to allocate more than 1 trillion yen for infrastructure-related reconstruction work in the first supplementary budget for fiscal 2011, due to be announced in a week's time.
The size of the budget which is designed to fund efforts to rebuild areas devastated by the 11th March earthquake and tsunami, will probably exceed 3 trillion yen. With some in the DPJ calling for more funding, the amount could reach 4 trillion yen. The first supplementary budget will focus on such tasks as clearing debris, rebuilding infrastructure and constructing over 60,000 temporary houses.
Longer term measures will be funded by the second and ensuing supplementary budgets. The Land and Infrastructure Ministry estimates the damage to roads, rivers, water systems and other infrastructure at about 1.56 trillion yen as of the end of March. The ministry intends to request around 1.1 trillion yen for work on facilities that require urgent repairs or rebuilding. Preventing secondary disasters, such as landslides, is also high on the agenda.
Building temporary levees is among the measures that need immediate funding. Water supplies had yet to be restored for roughly 160,000 homes in eight prefectures.
The Health Ministry seeks to have the central government shoulder 80% of the cost of repairing waterworks, a proportion higher than the normal 50%.
The Agriculture Ministry will seek funds for rebuilding levees and drainage systems to aid in farmers efforts to restore farmland.
The BOJ also cut its economic assessment for the first time since October last year as it maintained its benchmark overnight rate close to zero. The Nikkei captured modest gains after losses the two previous session although traders remained wary ahead of earnings announcements.
