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

Source: Government of Japan, Cabinet Office, PFI Promotion Office (2011). PFI Annual Report (FY 2009)
Table 5: �umber of Projects in Each Field (As of December 31, 2010)
Fields
34
Administrator
State Local Other
Education and Culture (e.g. school, library, etc.) 1 (1) 90 (66) 32 (28) 123 (95)
Life and Welfare (facility for social welfare for aged, etc.) 0 17 (15) 0 17 (15)
Health and Environment (hospital, waste disposal facility, etc.) 0 64 (45) 2 66 (45)
Industry (sightseeing facility, etc.) 0 13 (10) 0 13 (10)
Town Development (park, airport, etc.) 6 (6) 34 (28) 0 40 (34)
Public Safety (police office, prison, etc.) 7 (6) 14 (11) 0 21 (17)
Government building and accommodation 44 (21) 8 (5) 1 (1) 53 (27)
Others (complex facilities, etc.) 4 (1) 38 (30) 0 42 (31)
Total
Total 62 (35) 278 (210) 35 (29) 375 (274)
Note: The numbers in parentheses are the number of service in operation, which also includes ended projects.
Source: The Cabinet Office of Japan, PFI Promotion Office (2011). Current Status of PFI.
www8.cao.go.jp/pfi/pdf/221231pfidata.pdf
Few cases of PFI have been applied to the social infrastructure because private sectors have little
knowledge of it for the reason that it had been typically the responsibility of the government and
because the institutions, which enable private sectors to enter the market, have not yet been
functional. Furthermore, the fundamental reason is that there was no social agreement for the
private sectors to develop social infrastructures (See Appendix 2).
Trend Classified by Facility Ownership
The number of projects classified by facility ownership reveals that most businesses adopt the
BTO method when the ownership of the facility during the project period is on the
administrator’s side. For example, BTOs account for 76% of the projects in FY 2009 (See
Figure 8). Based on this, the following reasons have been noted: (1) the BOT or BOO method,
where the ownership of the facility during the project period is owned by the operator side, can
produce little VFM because of real estate acquisition tax, property tax, and city planning tax,
(2) the equal footing of the subsidy system has not been fully achieved, and (3) many projects
need the business operations to be performed directly by the administrator.
Trend Classified by Project Type
As for the projects classified by project type, the service sold projects account for a majority of
the projects (e.g., more than 80% in recent years), which means that the reality of a Japanese
PFI is close to the installment payment of the facility maintenance costs. The financially
free-standing project that collects a fee from users has not become widespread (approximately
4% of the total).