Rebuilding Japan

Rebuilding northeastern Japan likely to take years, cost tens of billions of dollars

Excerpt:

Reconstruction will be extremely challenging because the damage is so widespread and has likely destroyed power lines and water treatment facilities, said Jun Yang, president of the Hong Kong branch of the American Society of Civil Engineers.

"In my view it would take five to 10 years to rebuild or repair," said Yang, who as an associate professor at Hong Kong University carried out field research in Sichuan, China after the devastating earthquake there in 2008.

That timeframe doesn't include any radiation contamination from earthquake-crippled nuclear reactors, which could have a "potentially significant effect on the post-earthquake rebuilding," he said.

The nuclear crisis has taken a dramatic turn for the worse following an explosion and a fire at reactors at the Fukushima Dai-ichi power complex. Japanese authorities ordered emergency workers to withdraw from the stricken nuclear plant Wednesday amid a surge in radiation, temporarily suspending efforts to cool the overheating reactors.

"The destruction to ports, power plants and oil refineries in northeast Japan has been extensive," economists Matt Robinson and Ruth Stroppiana at Moody's Analytics wrote in a report. "The cleanup will take months, and the rebuilding of key infrastructure will take substantially longer."

The rebuilding effort is expected to require tens of billions of dollars of public spending that will benefit construction companies but add to the already swollen national debt.

After the 1995 Kobe quake, Japan's economy was able to rebound relatively quickly because the government hiked public spending by more than 15 percent in the following 12 months.

This time around, the government can't afford to spend so freely because it's already straining under a debt load that is double the size of the economy, said the Moody's analysts.

Any stimulus package will probably be paid for in later years by austerity measures, they said.

The mammoth recovery effort will likely mean rebuilding entire towns from scratch and it could be several years before significant construction work is even started, said Ken Collis, an Australian standby member with RedR, which coordinates engineering teams for disaster relief efforts.

Collis said that from his experience helping on reconstruction efforts in the Maldives after the 2004 tsunami, the initial planning phase could take up to a year as people who have lost their homes are given temporary shelter and officials decide what exactly is needed and where money is best spent.

Another year could be spent on designing the new roads, bridges, houses and other buildings that need to be rebuilt, while a third year is spent putting contracts out for bidding.

"It could easily take three years before significant reconstruction is done," Collis said.

Comment: My guess ... a 10-15 year effort. Keep in mind that New York's ground zero still has not been completed (almost 10 years since 9/11). New Orleans still has not totally recovered after Katrina (2005). Don't miss the above point - "the government can't afford to spend so freely because it's already straining under a debt load " - there's a lesson not to be lost!