US$30b in Japanese tsunami reconstruction money remains unspent

Thirty billion US dollars in funding for roads, bridges and thousands of new homes in areas devastated by the tsunami in Japan three-and-a-half years ago is still languishing unspent in the bank. That means Keiko Abe is heading into a fourth winter of sub-zero temperatures in a cramped, temporary dwelling that is succumbing to the elements.

"I'm just clenching my teeth until I can move out and live like a human being again," says Abe, 66, as she stands in the dim light of her living room with enough space for a couch, table and television. A grey mould clings to some walls of the prefab structure, where Abe has lived with her husband since shortly after a nine-metre wall of water obliterated large swathes of the city of Ishinomaki on March 11, 2011.

Abe, who lost her home and everything in it that day, is now the victim of a funding quagmire that has left her and tens of thousands of other evacuees stranded in temporary units that were supposed to house them for no more than two years.

Japanese government funds budgeted for reconstruction and transferred to local governments are stuck in banks across the tsunami-ravaged northeast, a review of budget and bank deposit data and interviews with bank officials reveals. The central government has paid out more than US$50 billion directly to local governments in Miyagi, Iwate and Fukushima prefectures, the areas hardest hit by the disaster. But about 60 per cent of that money remains on deposit in the region's banks.

Ishinomaki, where more than 3,700 people died in the tsunami - the most casualties of any city in the disaster - has been deeply affected by the funding paralysis. The port city, where 56,000 buildings were damaged, has been showered with money for reconstruction - about US$4.1 billion in the three years after it was hit.

But almost 60 per cent of the money, or US$2.3 billion, remains in bank deposits. And fewer than five per cent of the planned new homes for the city's nearly 25,000 evacuees have been completed.

"I've given up on the local authorities," says Abe. "They don't think about us."