Japan promotes PFI by relaxing rules further

The Japanese government is planning to further promote the sales of management concessions for public facilities such as sports facilities and harbours. To make PFI (Private Finance Initiatives) more attractive for private companies, the government is planning to make it easier for winners of concessions to invite tenants to their facilities. With this he government hopes to stimulate the revitalization of the areas surrounding the facilities and improving profitability, thus raising the bidding prices for the concessions, which in turn can improve local municipalities finances.

 The PFI Law will be adjusted in March and facilities related to the 2020 Tokyo Olympics will also fall under the Law. For example, the management rights for newly built Ariake Arena, which is the venue for the Olympic volleyball competition is expected to be auctioned in 2018.

 With many municipalities facing financial difficulties to maintain public facilities, PFI is gaining more momentum in Japan. The Ministry of Land Infrastructure, Transport and Tourism (MLIT) is planning to auction off concessions for regional airports under its supervision, starting with Sendai Airport. Cities such as Hamamatsu, Osaka and Nara are also investigating the possibility to auction of concessions for the water-supply and sewerage facilities.

 Currently, the regulations with regard to inviting third party users in the facilities is regarded as to complex and cumbersome. The upcoming relaxation was spurred by a request by Fukuoka City, Kyushu  that requested a change as the current rules were impeding with its efforts to redevelop its port facilities in Hakata, in order to attract international cruise ships and conferences.

 

Source: Nikkei Online,  公共施設 民営化を推進 運営企業がテナント誘致容易に Feburary 16, 2017