TOKYO (Nikkei)–The government’s new Reconstruction Agency, tasked with rebuilding the area devastated by last year’s March 11 earthquake, begins work on Friday.
While the agency is expected to eliminate red tape and speed up rebuilding in the Tohoku region of northeast Japan, serious labor shortages at construction sites are hampering the rebuilding effort.
In Natori, Miyagi Prefecture, a Value The Hotel building is going up quickly at a site facing a bypass in Sendai. The makeshift lodging, which is scheduled to open in June, is built from Chinese containers and is meant to house construction workers. Sparx Group Co. (8739) is financing the project through an investment fund it set up to help with reconstruction. It plans to contract Kachikaihatsu Co. (3010) to run the hotel. Sparx is planning hotels in Iwate and Fukushima prefectures as well, offering 4,000 rooms in all.
General contractors have been clearing towns in Tohoku of debris left by the colossal earthquake and tsunami since last year. Kajima Corp. (1812), which is disposing of debris in Ishinomaki, Miyagi Prefecture, initially planned to hire local workers and did not think about securing lodging for those on site. But faced with a serious labor shortage, it has had no choice but bring in manpower from Hokkaido and the Kanto region surrounding Tokyo.
Have shovel, will travel
General contractors must pay room and board costs for workers brought in from outside. Accommodation plus two meals a day costs about 5,000 yen per worker. “People are less willing to go to job placement offices when they are on unemployment insurance,” said an official at one builder, voicing industry concerns about lingering labor shortages.
To make up for the lack of skilled workers, the Infrastructure Ministry in late January held a training session in Sendai to teach the basics of demolition. Buildings that were damaged by the tsunami and cannot be repaired have to be torn down, but workers qualified to do the job are in short supply. There is also a shortage of moldmakers, who produce concrete molds for buildings.
In Miyagi, Iwate and Fukushima prefectures, and in the city of Sendai, some reconstruction projects have had no successful bidders due to labor shortages and rising labor costs. In Miyagi, 7% of all construction projects had no successful bidders in fiscal 2010; the figure jumped to 39% in November in 2011.
“This is unthinkable,” said the president of a midsize construction company in a coastal region of Miyagi Prefecture. His company has received orders for eight reconstruction projects, five of which it is subcontracting to big-name builders due to a lack of manpower. He sounded out other local construction firms, but they too are having trouble finding workers and declined his offer. Major companies are scouring the country to find people for reconstruction projects.
When it came into power in 2009, the Democratic Party of Japan advocated a shift in spending from public works to people. But that pledge has fallen by the wayside, with the government earmarking huge sums for reconstruction.
Typically, the government secures funding for rebuilding projects and municipalities place orders for those projects to rebuild quake-hit areas, but that approach is not viable in the face of serious labor shortages. It is of prime importance to secure the necessary manpower, otherwise the new agency will not be able to demonstrate its ability to coordinate Tohoku’s post-quake recovery.
— Translated from an article by Nikkei staff writer Shogo Nakatani, Akira Yamane
(The Nikkei Business Daily Feb. 10 edition)