TOKYO, July 16: A draft of Japan's post-quake reconstruction plan expects the recovery effort to cost up to $152 billion over five years, but does not address tax rises seen as necessary to pay for the project, the Asahi daily said on Saturday.

It also called for development of solar and wind power as long-running attempts to bring the Fukushima nuclear power plant under control have generated public disillusion with nuclear energy and prompted authorities to consider alternatives.

The government plans to compile the reconstruction scheme by the end of the month as the backbone of a third extra budget to be compiled in a few months.

“(The draft) estimates recovery costs for the next five years at 10-12 trillion yen ($126-$152 billion), and calls for installation of some of Japan's largest solar-power and wind-power facilities in the disaster-hit area,” the Asahi said. “Specifics of tax hikes for financing the reconstruction are not in the scheme, delaying the debate to August and later.”

The 9-magnitude quake and tsunami devastated a large swath of northern Japan, and recovery expenditure will likely drive Japan, already saddled with public debt twice the size of its $5 trillion economy, deeper into deficit.

The crippled Fukushima plant is still leaking radiation.

A government advisory panel on reconstruction said last month that a temporary increase in “basic taxes” should be discussed to help pay for Japan's biggest rebuilding project since the period following World War Two.

“Basic taxes” refer to such items as income, sales and corporate taxes.

The proposal for building large-scale solar and wind power facilities and promoting the concentration of renewable energy-related industries in the disaster-affected region fits well with Prime Minister Naoto Kan's policy to shift to green energy.

Kan remains under fire from the opposition and rivals within his own Democratic Party for his response to the disasters and has bowed to pressure to resign -- though without saying when he will step down.

He said this week that the radiation crisis at the Fukushima plant triggered by the tsunami had convinced him Japan should wean itself off nuclear power and eventually drop it altogether.

The quake and tsunami knocked out the cooling functions of Tokyo Electric Power Co's Fukushima plant, triggering the world's worst nuclear crisis in 25 years and raising worries about power shortages.

The company says it is sticking to a plan to bring the plant under control by January, though some critics say that is excessively optimistic.

On Saturday, Kansai Electric Power Co, which serves western Japan, said it planned to shut down one of its reactors due to technical glitches, further compounding the tight power supply and stifling the nation's manufacturing activity.

By the end of next week, only 16 of 54 reactors in Japan will remain on stream amid debate on the future role of the nuclear sector. —Reuters

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