The land ministry has drafted a bill to establish an urban redevelopment body that would call for utilizing private-sector funds and technologies, according to ministry sources.

The Land, Infrastructure and Transport Ministry plans to set up the independent administrative body in July 2004 by reorganizing the Urban Development Corp. and Japan Regional Development Corp. as part of an overhaul of public corporations.

Under the draft, the body would ask private firms to invest money, management skills and technologies, the sources said.

The body's main duties would be revitalizing large cities and taking charge of public housing for 2 million people.

It would have the new task of investing in or extending loans to a special-purpose redevelopment company to be established by private firms with the land minister's approval.

But it would withdraw from businesses such as development of new towns, construction of subdivisions and railways due to a reduced need for government involvement.

Provisionally, it would still run some subdivisions and railways designated by the land minister as well as already launched town developments, and facilities in national parks that charge fees.

For rental family housing, it would only develop lots and build frames for strong buildings that could stand for 100 years. The private sector would complete the buildings, and the body would lease it the properties.

It would proceed with cost-cutting efforts on rental housing held by the Urban Development Corp. by expanding private-sector management.

The independent administrative body will take over the businesses of the Urban Development Corp. and local development projects of the Japan Regional Development Corp.