Ministry of Land, Infrastructure, Transport and Tourism, Ministry of Internal Affairs and Communications/Facilitation of business acceleration Utilization of government bonds in subsidized projects, promotion of planned implementation of five-year measures
The Ministry of Land, Infrastructure, Transport and Tourism and the Ministry of Internal Affairs and Communications have established a new framework for national treasury debt obligations (government bonds) aimed at the smooth execution of long-term projects based on the 5-year acceleration measures for disaster prevention, mitigation, and national resilience. Encourage local governments to make use of the government bonds. A document has been issued not only for projects under the direct control of the Ministry of Land, Infrastructure, Transport and Tourism, but also for individually subsidized projects, in response to requests from local governments. In light of the government's moves regarding the formulation of a supplementary budget, it seems likely that it is meant to encourage local governments to make advance preparations for its use.
The Ministry of Land, Infrastructure, Transport and Tourism, Real Estate and Construction Economics Bureau, Construction Business Division, and the Ministry of Internal Affairs and Communications, Ministry of Internal Affairs and Communications, Local Government Administration Division, jointly signed a document titled ``Ensuring smooth construction by utilizing debt bearing actions based on the use of government bonds''. It was sent to prefectures and ordinance-designated cities on the 22nd.
Business acceleration facilitation government bonds were included in the 2021 supplementary budget for the first time. The supplementary budget has the adverse effect of making it difficult to start long-term projects. By using the same government bonds, we can also handle cases where the contract is concluded by the end of the fiscal year and completed by the flood season two years later. It will be possible to flexibly place orders for construction projects with a long construction period of three years or more, based on the five-year acceleration measures.
Both the first and second years of the five-year acceleration measures were implemented in the supplementary budget, and there is a view that this trend will be followed in the third year and beyond. The government plans to formulate new comprehensive economic measures to deal with rising prices and other factors by the end of October, and formulate a second supplementary budget bill for fiscal 2022, which will serve as a source of funding.
If the supplementary budget includes the third year of the five-year acceleration measures, it will be necessary to conclude a construction contract in a short period until the end of the fiscal year in order to utilize the government bonds. Issuing the document at this timing seems to be aimed at getting each local government to start identifying the target projects in advance.
According to the Ministry of Land, Infrastructure, Transport and Tourism, the use of the government bonds is limited to projects under the direct control, with very few exceptions. In addition to the effects of bringing forward contracts and completion of multi-year projects and systematically executing projects, we will also inform local governments of the benefits of securing an appropriate construction period and leveling the construction period.
