The Yomiuri ShimbunThis is the second installment of a series.

A new station building with a striking white roof stands on a rugged piece of land where a large number of construction vehicles are hard at work in Onagawa, Miyagi Prefecture, which was heavily damaged in the tsunami that followed the 2011 Great East Japan Earthquake.

Onagawa Station on the JR Ishinomaki Line is the core facility for reconstruction of the town, which will include an onsen hot spring and an art gallery. The town’s mayor, Yoshiaki Suda, 42, calls the station building “the navel of the town.”

Famed architect Shigeru Ban based his design for the roof on the image of a black-tailed gull spreading its wings. The building cost ¥850 million to construct.

To commemorate the completion of the station building, the town will hold an event for local residents on March 21.

A promenade stretching about 400 meters from the station to Onagawa Bay is planned, along with shopping areas and housing for earthquake victims that will be built on raised land.

The town government’s conceptual drawing of what the town will look like shows a completely new Tohoku community devoid of any damage caused by the tsunami.

The town government aims to complete the reconstruction work by the end of fiscal 2018. Only about 35 percent of the work has been completed so far.

The cost of reconstructing the town, which has a population of about 7,000, is expected to exceed ¥100 billion.

This amount is equivalent to 20 years of town government budgets before the 2011 disaster.

The town government aims to use central government’s reconstruction subsidies to finance most of the cost. Under this plan, the central government will effectively shoulder 100 percent of the cost.

However, the subsidies are an exceptional measure approved only during a five-year reconstruction period that ends in fiscal 2015.

“If the subsidies end, reconstruction of this town will cease,” Suda said. “I am asking for extension of the reconstruction period.”

Three prefectures in the Tohoku region — Iwate, Miyagi and Fukushima — want to continue reconstruction work in fiscal 2016 and later, so more requests for a continuation of reconstruction subsidies are likely.

On Feb. 10, 18 municipal government heads from Miyagi and Iwate prefectures visited the Reconstruction Agency and handed letters of requests to Wataru Takeshita, minister of reconstruction, calling for the period to be extended.

The central government will have spent ¥26.3 trillion during the current reconstruction period. But the three prefectures estimate another ¥8.1 trillion is necessary.

According to estimates, Fukushima Prefecture needs an extra ¥3.9 trillion; Miyagi Prefecture, ¥2.5 trillion; and Iwate Prefecture, ¥1.7 trillion.

Miyagi Gov. Yoshihiro Murai said: “If the period is not extended, some city or town governments will go bankrupt. If this happens, reconstruction will become impossible.”

Should the central government stop shouldering all the costs, Murai predicted that the prefectural government and the governments of municipalities along the coast will incur debts totaling ¥510 billion in the form of local government bonds in a five-year period from fiscal 2016.

In Diet deliberations and on other occasions, Prime Minister Shinzo Abe has repeatedly said: “We’ll ensure that surviving disaster victims will be able to live with a sense of security as soon as possible. As long as we can secure fiscal resources, we’ll respond appropriately.”

Abe has emphasized that funds necessary for reconstruction will continue.

However, sources of about ¥26.3 trillion that the central government earmarked include revenues from special income tax hikes lasting for 25 years and future revenues from profits from the sale of stocks it owns in Japan Post group companies.

Funds for reconstruction are collected from all possible revenue sources. Many government officials believed it will be extremely difficult to extend the reconstruction period, as tax hikes will be needed.

The government and the Liberal Democratic Party aim to cap budget spending for reconstruction purposes at between ¥1 trillion and ¥2 trillion every fiscal year, starting in fiscal 2016.

To do so, they plan to allocate large amounts of funds for projects regarded as highly important, while postponing other projects or asking local governments to shoulder some degree of the burden.

With disaster-hit local governments seeking huge amounts of funds, the central government aims to change its reconstruction policy into one that places importance on selection and concentration.

A tug-of-war between the two sides will likely intensify ahead of initial budget requests for fiscal 2016 budget to be submitted in summer this year.Speech