Text Fwd: [famoksaiyanfriends] Kyodo : U.S. says it can't repay Japan loan to build infrastructures in Guam

* Texts informed from Martha Duenas on Aug. 27, 2010

Kyodo News
US Says It Can't Repay Japan Loan to Build Infrastructures in Guam

Aug 27 06:33 AM US/Eastern / Aug 27 20:33 PM Guam/CST

WASHINGTON, Aug. 27 (AP) - (Kyodo) — The planned transfer of some U.S. Marines from Okinawa to Guam faces a financial hurdle as the U.S. government considers it will be impossible to repay a Japanese loan to finance infrastructure projects needed for the transfer of the Marines to the U.S. Pacific territory, bilateral diplomatic sources said Friday.

The United States has told Japan that it cannot work out a repayment schedule for more than half of a $740 million loan to be extended by the Japan Bank for International Cooperation, the sources said.

The Japanese government has begun to consider a delay in extending the loan, despite U.S. demands for its early provision.

Japan and the United States agreed to move some 8,000 U.S. Marines from Okinawa to Guam as a pillar of their agreement in 2006 on the realignment of U.S. forces in Japan.

The agreement included the JBIC loan to build water supply and sewage systems as well as power supply facilities for the Marines and their families.

While up to $435 million, or 58 percent of the loan, would be used to construct sewage facilities, the U.S. government planned to repay that portion with water charges to be collected by the Guam government.

But the Guam government refused to be liable for the repayment, making it impossible for Washington to prepare a repayment schedule for the portion, the sources said, adding that the repayment of the remaining portion would be also difficult in light of financial conditions in Guam.

The U.S. government is expected to avoid including details in a funding plan it will map out in September for the infrastructure building projects.

The Pentagon has said the transfer of the Marines could be delayed until 2017 from the current target of 2014.

As a long delay in the transfer could adversely affect the bilateral alliance, the Japanese government has not ruled out the possibility of shouldering the infrastructure-building costs, the sources said.

The planned JBIC loan is structured to have the Japanese government cover it if it goes sour.

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