When Tokyo asked for bidders to build what is expected to be the world's largest fish market on the city's vacant eastern edge there were no takers.
In a graphic illustration of how the hopes for "Abenomics" are falling short, the city was forced to raise by two-thirds its budget for the project to more than $1 billion U.S. before some of Japan's top construction companies stepped forward.
Tokyo's predicament highlights a deeper problem for Prime Minister Shinzo Abe's economic revival plan for Japan, comprising his "three arrows" of hyper-easy monetary policy, fiscal spending and growth-generating structural reform.
The construction industry has gone through a scorching restructuring over the past decade and a half of hard times since Tokyo last opened the fiscal taps, government officials and managers in the business say.
Many firms are choosing to walk away from government projects rather than invest more in equipment or hire workers - fixed costs that would be hard to shed in the next downturn. In the midst of a building boom, Japan's construction companies, who stand to benefit most directly from Abe's policies, are acting as though the good times will not last.
Some critics argue that spending on public works projects - a mainstay of Japan's economic stimulus efforts in the 1990s - is wasteful and Abe would be better off focusing on deregulation and reform.
But progress on that "third arrow" has been slow, and while Bank of Japan's massive monetary stimulus has been generally judged effective, the fiscal boost many hoped would keep the economy rolling is proving hard to restart.
Problems with the "second arrow" of Abenomics are biting at a crucial moment for Japan's recovery. Investors have grown wary of slowing growth as Japan's economy heads for a speed bump: a three-percentage-point hike in the consumption tax hike in April.
The benchmark Nikkei stock index is down nearly 8.5% this year - making Japan the worst performing major stock market.
Even before Abe's public works push, contractors were already struggling to absorb demand for new building projects tied to the 2020 Tokyo Olympics and reconstruction work in the areas of northern Japan destroyed by a 2011 tsunami.
With companies cautious and workers scarce, local governments have been forced to cancel or scale back plans. As a result, money budgeted for bolstering the economy has stayed stranded in public coffers.
Japan had to roll over to the next budget $37 billion U.S. it failed to spend out of the $98 billion U.S. earmarked for public works in the last fiscal year to March 2013. Government-funded construction projects contributed only a third as much to growth in the fourth quarter as they had in the previous two quarters.
Earlier this month, the Ministry of Finance issued an unusual directive urging other government agencies to expedite public works spending in the face of an endemic shortage of labor, especially in skilled jobs where experienced workers are retiring and a younger generation has not been trained. The government also hiked the allocation for labor costs by 7%.
