Japanese reconstruction estimates revised upwards

The cost of reconstruction work in Japan following Friday's earthquake could be as high as US$ 61 billion, according to a research note from Credit Suisse. Barclays Capital meanwhile estimates the damage done at JPY 15 trillion (US$ 183 billion). These represent a marked increase on early estimates of US$ 34 billion in reconstruction costs.

According to Barclays, 2722 people were confirmed dead as of 15 March, with a further 3742 listed as missing. The damage to buildings in the affected region included 3340 total collapses, 2528 partial collapses and more than 50000 partially damaged structures, most of which were residential.

The company said the final damage was likely to be greater than that caused by the 1995 Kobe earthquake, in which 6432 people were killed and some JPY 9.5 trillion (US$ 116 billion) worth of damage was done.

Having said that, the number of buildings destroyed or damaged in the Kobe earthquake was much higher than the figures reported from Friday's quake. In 1995 just under 105000 buildings totally collapsed, while 144000 partially collapsed and a further 264000 were damaged. However, the damage from the Kobe earthquake was concentrated in a much smaller region - essentially Hyogo Prefecture, as opposed to the widespread damage caused by the March 11 quake.

Credit Suisse meanwhile has estimated the total direct and indirect cost of the quake at JPY 14 - 1'5 trillion (US$ 171 - US$ 183 billion). It also noted that the four worst -affected prefectures - Ibaraki, Iwate, Fukushima and Miyagi - account for more than 6% of Japan's GDP - about JPY 32 trillion (US$ 391 billion).

The company said the initial disaster relief effort is likely to cost JPY 2 billion (US$ 24 billion), and that reconstruction costs could be as high as JPY 5 trillion (US$ 61 billion), spread over the next three years.