Prime Minister Ryutaro Hashimoto and the three-party ruling alliance decided April 18 to renege on a 1994 public works pledge made by Prime Minister Tomiichi Murayama to the United States, sources said.

The reason: There is not enough money in the government coffers.

In 1994, Japan promised to spend 630 trillion yen on public works in the decade until 2004 as a way to cut its trade surplus and encourage American construction firms to enter the Japanese market. The lack of fiscal funds mean the 10-year plan will probably be changed into a 15-year one, the sources said.

To attain the 10-year-plan, the government would have to boost its budget on public works — construction of roads, bridges, ports and other infrastructure — by 5 percent annually. More austerity measures will be revealed later, they said. In the fiscal 1998 state budget, for example, investment-related expenditures will be reduced by more than 10 percent, they said.

An annual public works budget item dubbed “NTT projects” will be abolished, they said. In 1997, that item was worth 1.3 trillion yen.

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