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Japan: Govt to Allow Recovery Funds to Carry Over
Source: yomiuri.co.jp
Source Date: Friday, November 30, 2012
Focus: Institution and HR Management
Country: Japan
Created: Dec 04, 2012

Recognizing exceptional circumstances, the government has decided that unused funds allocated for reconstruction from the Great East Japan Earthquake may be carried over to the next fiscal year for a second time. It will also simplify the application procedure.

The Local Government Law prohibits the carrying over of funds for a second time if the reason given is the same as for the first carry-over.

Disaster-stricken prefectures, concerned about delays in recovery efforts, welcomed Tuesday's move.

Governments of the three prefectures hit hardest by the quake and tsunami--Iwate, Miyagi and Fukushima--feared about 280 billion yen allocated for reconstruction work for fiscal 2011 and carried over to fiscal 2012 would have to be returned to the central government because of the rules. The money allocated for fiscal 2011 to repair piers and restore farmland was carried over to the current fiscal year due to delays in placement of orders caused by planning work that took a long time.

Many of the funds will not have been spent by the end of this fiscal year due to construction delays caused by shortages of materials and workers.

But these are problems that also existed a year ago, and the law states that allocated funds cannot be carried over for a second time for the same reason.

If local governments want to use the remaining funds, they usually have to suspend their projects at the end of the fiscal year--in this case March 2013--and return the unused portion to the national government. Then they must compile new budgets to get the funds back.

Because of the regulations, the disaster-stricken prefectures, concerned about further delays in recovery efforts, have asked the central government to respond to their requests for permission to continuously use the funds without a pause.

In response, the central government has decided to recognize such facts as rising construction material prices, including those of ready-made concrete, and construction delays due to unsuccessful bidding, which have occurred frequently this fiscal year, as "different reasons [that have to extend restoration projects]" for another fiscal year.

Unsuccessful bidding occurs when no potential contractors place bids.
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