Infrastructure PPP/Privatisation services to Japan

Trends and opportunities

The market

PFI Law was first introduced in Japan in 1999 and there have been over 520 PFI/PPP projects valued at approximately JPY5 trillion as of end of March 2016. However, most of the projects have been small scale facilities, so to further expand PFI/PPP, the Japanese Government passed a revised PFI Law introducing a ‘concession’ scheme in 2011. In May 2016, the Japanese Government developed an updated PFI Promotion Action Plan, aiming to achieve JPY21 trillion worth of PFI/PPP projects over ten years (2013FY – 2022FY), with focus on airports (six projects), mains water (six projects), sewage (six projects) and road infrastructure (one project) in 2014FY – 2016FY, and educational/cultural facilities (three projects) and public housing (six projects) in 2016FY – 2018FY.


Under the Abe Government’s Japan Revitalisation Strategy, known as ‘Abenomics’, an Airport Privatisation Bill was passed in June 2013, to undertake the phased privatisation of 28 airports owned and operated by the national Japanese government.

Based on this legislation, the Kansai International Airport/Itami International Airports concession was granted to the consortium led by ORIX (Japan’s leading leasing company) and French airport operator Vinci Airport. The Consortium commenced operations from April 2016.

The first case of a regional airport privatisation was the release by MLIT (Ministry of Land, Infrastructure and Transport) of the Sendai Airport Privatisation Application Guidelines in June 2014. Four groups – Tokyu (Japan’s leading transport/development conglomerate)/Macquarie, Mitsubishi Estate/ANA, AEON (Japan’s largest retailer), Mitsubishi Corp/Rakuten (Japan’s e-commerce giant) submitted proposals and passed the first assessment phase. After the second evaluation, the Tokyu consortium won and signed the concession agreement in Dec 2015. The Tokyu consortium consists of Tokyu Group, Maeda (a major construction company) and Toyota Tsusho (the Toyota Group trading firm) with Macquarie group as a financial advisor. The consortium commenced operation of the airport in July 2016.

Following the Sendai Airport, further airports privatisation projects are being advanced.

MLIT conducted market consultations on the Privatisation Scheme of Takamatsu Airport (annual passenger numbers 1.8 million) in October 2015 and based on that, released the Takamatsu Airport Privatisation Implementation Policy in July 2016. The Privatisation time-line is as follows:

  • September 2016: Publication of Application Guidelines
  • August 2017: Selection of Preferred Negotiation Rights Holder
  • October 2017: Execution of Project Agreement
  • April 2018: Airport Operating Business Commencement Date

Following Takamatsu, MLIT aims to privatise Fukuoka Airport in 2019 and Shin-Chitose (Sapporo) Airport bundled with other three smaller airports in Hokkaido (northern island) in 2020.


Leveraging the National Strategic Special Zone Law, the Aichi Prefectural Government advanced the privatisation of eight of their toll roads, releasing the Implementation Policy of Concession in October 2015, followed by the Aichi Prefecture Toll Roads Application Guidelines in November 2015. Orix (Japan’s leading non-bank), Kumagai (a large construction company), Mitsubishi Corporation and other consortia have submitted applications and the consortium led by Maeda (a construction company), Macquarie Group and Mori Trust (developer) was selected as the preferred negotiator in June 2016. It is expected the private operation will commence in October 2016.

Mains Water and Sewage

Hamamatsu City has decided to privatise part of its sewage network and released an Implementation Policy in February 2016 and Application Guideline in May 2016. Initial application deadline is scheduled for August and following competitive dialogue and assessment the preferred negotiator will be selected and the basic agreement will be signed in March 2017. Concession rights will be awarded in October and the private operation is schedule to start in April 2018.

Osaka City has considered privatisation of mains water and Nara City part of its mains water and sewage, but their respective assemblies have not yet approved the proposals from city governments.


Whereas Japanese Governments are pressing ahead with more infrastructure PFI/PPP projects, Japanese corporates typically lack operational experience or knowledge of the infrastructure operations business. This gap in the market represents opportunities for Australian firms with infrastructure PPP/privatisation capabilities.

Australian businesses with demonstrated expertise in this sector are in a strong position to proactively approach potential Japanese business partners.

Australian firms are well placed to compete for commercial opportunities generated by the privatisation process. Opportunities are likely to emerge in the following areas:

  • Infrastructure operations and management in Japan through the purchase of concession rights supported by expertise in regard to financing projects
  • Advisory services to both the sell and buy sides (preliminary research, transaction preparations, bid process management, master planning)
  • Advisory services to Japanese corporates interested in infrastructure operations and management in international markets
  • Marketing and value adding to infrastructure projects
  • New technology and technical services to improve asset value and efficient operation

Links and industry contacts

Government, business and trade resources

Ministry of Land, Infrastructure, Transport and Tourism (MLIT)
Ministry of Foreign Affairs (MOFA)
Ministry of Economy, Trade and Industry (METI)
Japan International Cooperation Agency (JICA)
Jana Bank for International Cooperation (JBIC)
The Overseas Construction Association of Japan, Inc (OCAJI)

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