Expansion of the Soil Contamination Investigation Market in Shiga Prefecture - February 2003

Expansion of the Soil Contamination Investigation Market in Shiga Prefecture - February 2003

The market for simple risk surveys of soil contamination has been active since the beginning of 2003. The biggest factor is the impact of the Soil Contamination Countermeasures Law, which went into effect on February 15, 2003. Under this law, factory sites where hazardous substances were used were subject to mandatory soil contamination surveys at the time of site conversion. This led to increased nationwide interest in soil contamination and the risk of falling land prices.

In response to this trend, a company in Shiga Prefecture has introduced a simplified diagnostic technology from the United States to provide soil contamination risk survey services for developers, real estate distributors, financial institutions, and real estate appraiser offices. The technology is characterized by its ability to conduct simple diagnosis through geographical history surveys and interviews, and to do so at a low cost.

In addition, MMC and Mitsui Fudosan Sales have formed an alliance to strengthen cooperation in surveys of commercial real estate handled by Mitsui Fudosan Sales and in detailed due diligence surveys (detailed surveys of real estate). This will advance the management of soil contamination risks in real estate transactions.

In 2003, more and more new companies have entered the market. Companies in Tokyo's Chiyoda Ward, for example, have begun offering a simple survey service at a low price of around 40,000 yen per site. This has increased demand among businesses and real estate agents. In addition, the soil contamination market is growing rapidly, with major general contractors developing remediation projects and forming alliances with financial institutions.

Behind this market expansion is an impairment accounting system scheduled to be introduced in fiscal 2005. Under this system, the risk of a decline in land prices will directly affect financial valuations, making it essential to investigate the risk of soil contamination. For this reason, banks and real estate companies across Japan are accelerating their use of Shiga Prefecture's simplified diagnostic technology for rapid risk assessment.