An advisory panel to the transport minister on Thursday approved construction of some 700 km worth of expressways at a cost of roughly 2.4 trillion yen.

The central and local governments will pay for the roads, using taxpayers' money.

The expressways in question involve 27 sections around the country and form part of the government's plan to build 9,342 km of expressways nationwide.

The 27 sections will be built under this funding format as they are unlikely to be profitable and would not be able to cover maintenance costs via toll revenues.

Local governments have lobbied hard for their construction, however, and were willing to put up some of the money themselves.

The decision came during a meeting of the panel, which comprises 10 Diet lawmakers, including senior officials of the Liberal Democratic Party, and 10 private-sector representatives, including Hiroshi Okuda, chairman of the Japan Business Federation (Nippon Keidanren).

Some panel members voiced opposition to the decision, saying the Land, Infrastructure and Transport Ministry had tried to ram the plan through without giving the panel enough time to discuss details.

The roads selected Thursday will be toll-free when completed, while other expressways that are not built under this funding scheme will remain toll roads until the nation's expressway operators repay their combined debts -- worth 40 trillion yen -- over 45 years.

In choosing the 27 routes, the ministry assessed the cost benefits, profitability and social and economic effects of 70 unfinished sections of expressways stretching 1,999 km.

The routes that were not selected Thursday are expected to be built by Japan Highway Public Corp., which is scheduled to be privatized in fiscal 2005.

Once the privatization process is complete, however, the new firms will have the right to refuse to build the routes if their profitability and usefulness are questionable.

In that case, the central and local governments would have to build more sections at their own expense.

The panel also formally decided Thursday to reduce total expressway construction costs by 3.8 trillion yen from the originally estimated 20 trillion yen, and to discuss the ministry's proposal to cut the figure by another 2.5 trillion yen.

In conjunction with local governments, the central government is planning to spend 3 trillion yen over the next 15 years on expressway construction.

Another 3 trillion yen will be shouldered by Japan Highway, with another 7.5 trillion yen expected to be put up by the companies created through Japan Highway's privatization.

Protest resignations

The government on Thursday approved the resignation of two members of a prime ministerial advisory panel tasked with overseeing the privatization of semigovernmental expressway corporations.

The two members -- Kazuaki Tanaka, acting chairman of the panel, and Masatake Matsuda, chairman of East Japan Railway Co. -- turned in their resignations to Prime Minister Junichiro Koizumi on Monday in protest at the privatization scheme mapped out by the government and the ruling coalition.

They said the scheme runs counter to a proposal submitted a year ago by the advisory panel, in which debt repayment was to be prioritized over construction.

They said it paves the way for the state to continue wasteful expressway construction and delay the repayment of debts.

Meanwhile, another panel member, Yuko Kawamoto, a financial expert from Mckinsey and Co. Inc., said the same day that she would not resign but would refrain from attending the panel's meetings.

In spite of this turbulence, Noriyuki Kazaoka, senior vice minister of land, infrastructure and transport, said his ministry will submit relevant legislation to the Diet by mid-March in order to realize privatization in fiscal 2005.