Risk Management and Governance for PFI Project ... - Title Page - MIT

Chapter 1: History of PPP in Japan
Japan has long history of PPP. This chapter reveals the history of PPP policy in Japan, cites cases of
failure of the third sector scheme and takes into consideration the lessons learned from these cases.
History of PPP
The history of public-private partnership in Japan can extend back to the “min-katsu” (private
resources mobilization) policy in the era of the Nakasone cabinet. Min-katsu was the policy
resulting from the expansion of domestic demand and aiming to utilize the vitality of the private
sector to resolve the deficit balance of foreign trade.
In 1985, the National Land Agency 3 produced the capital reform project that had promoted
large-scale city development by the private sector, especially in the Tokyo area. In 1986, the Private
Sector Resources Utilization Law was enacted under Prime Minister Nakasone, which was when
the Kansai International Airport and Tokyo Bay Aqua-Line (which will be described in detail later)
were planned as two major projects utilizing the private sector’s resources for public works to
promote efficient projects.
In 1987, the Resort Law was enacted, and the development of resorts using the third sector was
promoted in rural areas. During this period, a number of third sectors were utilized as a new private
method for mainly resort facilities. The third sector, however, had an unclear mechanism regarding
where the responsibility lay, and many projects collapsed in the 2000s because it was not fully
functional in the time of a recession. In addition, during this period, three large corporations (Japan
National Railways, Nippon Telegraph and Telephone Corporation and Japan Monopoly
Corporation) were privatized, and JR, NTT, and JT (Japan Tobacco) were born.
In 1988, the Association for Corporate Support of the Arts Council was established at the peak of
the so-called bubble economy, and the corporate social contribution became a major topic. It has
been called a new PPP era since this time.
In 1989, the symposium of PPP (public-private partnership in urban development) was held in the
Japan-US joint base, where the PPP cases of both countries, the historical circumstances in the
United States, the whole concept of organization about the public-private cooperation, the
mechanism of financing, and the regulation policies such as taxation, subsidies, and incentives were
reported.
3 National Land Agency was merged into Ministry of Land, Infrastructure, Transport and Tourism (MLIT) on January 6,
2001.
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