Estimating the Indirect Costs of Resettlement due to Dam Construction: A Japanese Case Study

Abstract

In order to help clarify the true costs of resettlement for dam construction, the measures taken for consensus building and livelihood rehabilitation for people affected by the Miyagase Dam, a state-of-the-art dam in Japan that started operating in 2000, were studied. An area of 490 ha was submerged and the number of displace households was 281. While the dam construction project lasted for 30 years, resettlement-related activities, such as compensation negotiations and the establishment of resettlement sites, continued for 20 years after the announcement of the dam project. ‘Direct’ compensation costs, which were included in the official project cost, include financial compensation for submerged land and property. They are estimated at about ¥24.5 billion. ‘Indirect’ compensation costs are not included in the official project cost. The largest component of the indirect compensation costs was the various projects conducted based on the Upstream Regional Stimulation Plan, amounting to a total of ¥67.9 billion. Based on the Plan, 85 projects were implemented, including slope reinforcement, village roads, waterworks and sewerage works, schools, afforestation, parks, childcare centres and waste treatment facilities. In addition to the projects, resettlement sites were offered at lower rates than the values of adjacent land, and the total difference in costs amounted to ¥3.3 billion. Moreover, ¥2.8 billion was paid as ‘gratitude money’ to people displaced by the dam. The total indirect compensation costs including personnel costs for officers devoted to the resettlement are estimated at ¥78.6 billion. The direct compensation costs amount to only 6.1% of the officially announced total project costs of ¥399.3 billion. If indirect compensation costs are also included, the total project costs would amount to ¥477.9 billion, and the total direct and indirect compensation costs of ¥103.1 billion would amount to 21.5% of total project costs.