New Construction market report from Business Monitor International: "Japan Infrastructure Report Q3 2013"
Boston, MA -- (SBWIRE) -- 07/29/2013 -- We continue to expect Japanese construction activity to improve in 2013, with a stimulus package in early-2013 and a large project pipeline generating real growth of 3.2% in 2013, higher than the growth rates seen in 2011 and 2012. However this short-term boost in construction activity will come at the expense of long-term growth in the construction sector, with fiscal and borrowing cost concerns adversely affecting long-term capital expenditure plans. Although there have been attempts by the government to carry out reforms to spur long-term construction growth, the successful implementation of these reforms is still in doubt and, more importantly, they fail to address the structural problems affecting long-term construction demand.
Key developments in the sector:
- In April 2013, the Japanese government adopted a bill to allow the private sector to run state-owned airports. The legislation is aimed at promoting greater effective management of these state-owned airports and could create greater opportunities for the private sector, both in terms of airport management and construction.
- In May 2013, US investment bank Goldman Sachs announced that it was planning to develop up to JPY300bn of renewable energy projects in Japan over the next five years. The company has said that it would invest up to JPY50bn by itself and take as much as JPY250bn in bank loans and project-financing. Goldman had formed a Japanese subsidiary called Japan Renewable Energy in August 2012 to plan, design and operate power plants run on sun, wind, fuel cells and biomass fuels.
- In May 2013, two of Japan's biggest utilities, Tokyo Electric Power (TEPCO) and Chubu Electric, were reportedly in talks to form a joint venture (JV) to construct a coal-fired thermal power plant in Ibaraki Prefecture, east of Tokyo. The new facility was build at the site of TEPCO's Hitachinaka thermal power plant in Tokai, and is planned to be operational in 2019. Chubu is reported to have agreed to put up 90% of the plant operator company's capital, while the plant 70% of the generated electricity would be supplied to TEPCO. Chubu is expected to sell the remaining 30% to customers in the Tokyo metropolitan area.
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