The central government approved a ¥6.5 trillion, five-year program to help areas hit by the 2011 earthquake, tsunami and nuclear disaster to recover, under a plan that will see local governments begin to shoulder part of the cost.
Local governments in Iwate, Miyagi and Fukushima prefectures are expected to pay about ¥22 billion. The remainder will be covered by the central government in the five-year period starting in April 2016, according to officials.
It program represents a policy shift by the central government because it has paid for all costs for reconstruction projects thus far.
The central government has cited the need to consolidate its debt-ridden finances, instead encouraging disaster-hit regions to promote reconstruction without relying too much on the state.
Under the program, local authorities are required to bear 1.0 to 3.3 percent of the costs for reconstruction work, one-tenth or less of the levels set for public works projects, the officials said.
Local authorities had demanded the state shoulder all the costs for reconstruction work, saying a fiscal burden will undermine their recovery efforts and hit financially weak municipalities.
However, the governors of the three prefectures on Monday indicated they would accept the new formula after the state reduced their share from about ¥30 billion to about ¥22 billion.
According to the officials, the program will allocate ¥3.4 trillion for rebuilding homes and communities damaged by the disaster.
Some ¥500 billion will be earmarked for reconstruction related to the nuclear disaster at Tepco’s crippled Fukushima No. 1 plant, and ¥400 billion for supporting survivors.
The state is calling the five years from April 2016 a “revival and creation period,” aiming to finish reconstruction work in Iwate and Miyagi prefectures and to speed up the reconstruction of the nuclear crisis-hit Fukushima Prefecture.
Including the ¥6.5 trillion, the total reconstruction costs for a 10-year period from the 2011 calamity will amount to ¥32 trillion.