The government may differentiate the amount of subsidies to aid local governments’ infrastructure development by prioritizing municipalities that are active in maintaining aging public facilities, sources said.
Currently, the subsidies, which can be used for building roads, sewage systems and other infrastructure in a package, are provided uniformly nationwide.
Related ministries will begin reviewing the infrastructure subsidy system for the fiscal 2015 budget, the sources said.
In efforts to tackle the problem of aging public facilities, the central government In April asked local governments to work out by the end of fiscal 2016 a program on the maintenance of all public facilities under their management, including upkeep for these facilities.
It also offered to help local governments pay for drawing up such programs while also financially supporting the demolition of facilities under the programs.
As of Oct. 1, however, just 6.2 percent of local governments said work to draw up the programs will be completed by the end of fiscal 2014, a survey by the internal affairs ministry showed. The survey showed that the work has been delayed mainly among municipalities that manage an overwhelming proportion of the nation’s public facilities.
The Finance Ministry proposed the idea of differentiating the amount of infrastructure development subsidies by region, the sources said.
For municipalities that apply for subsidies after drawing up their facility maintenance programs, the ministry is calling for giving all of the requested amounts. The remaining subsidies would be allocated evenly to municipalities that have not worked out such programs.
The proposal is aimed at urging municipalities to quickly create the programs and to use the subsidies to solve the problem of aging facilities.
The Finance Ministry also plans to propose that subsidies to local governments that have not mapped out facility management programs be halted, beginning in fiscal 2017, the sources said.
The current infrastructure subsidy system was established in fiscal 2010. Some ¥910 billion has been set aside for the system under the fiscal 2014 initial budget.
Local governments can use the subsidies for a package of more than one infrastructure development project, such as projects to build roads and harbors and redevelop urban areas.
While the subsidy system is expected to help promote the initiative of developing so-called compact cities, it has been criticized as encouraging local governments to build new infrastructure while postponing the renovation of aging facilities.
The compact-city initiative calls for consolidating commercial, medical and other functions of a municipality to the central part of the community so that residents can move from one facility to another on foot or by public transportation, without using their vehicles.