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

Office of the Cabinet Office is considering publishing a guideline to treat such proposals
preferably in the tender process of the PFI. (Anderson Mori & Tomotsune Law Firm, 2011)
Currently, the project management integration of Itami Airport and Kansai International Airport is
arranged as the first projects that take advantage of the concession system based on the new PFI Act.
It aims to improve the management of the Kansai International Airport Co., Ltd. by compressing its
huge debt (approximately 1.3 trillion yen) by collecting a concession fee from the private operator;
therefore, building the scheme for it has become an urgent task.
In addition, the Government of Japan has started creating model cases using the new PFI method,
including a project involving all 29 airports managed by the national government and projects
involving the water and sewerage systems that are owned and operated by local governments.
Additionally, projects for the restoration of the Sendai airport and the water and sewerage systems
in the Tohoku region that utilize the PFI are also being planned. (Fukuda & Taniyama, 2011)
Summary
This chapter provides the history of the introduction of Japanese PFIs and an overview of its
institutions. The PFI has been introduced with an expectation of overcoming the failure of the third
sector; however, at present, it is not sufficiently prevalent in certain fields, such as large-scale
infrastructure. This is because there are problems, including barriers to entry, constraints on the
legal system and a low entry incentive, that have resulted from the government-led scheme
In light of these problems, the new PFI Act was proposed by the Cabinet Office and adopted by the
Japanese Diet in May 2011. The new PFI Law allows the private sector to enter the new facility
management and to sell the rights to operate a government-owned facility to private companies
based on the concession scheme. In addition, the new PFI Law allows for business proposals by the
private sector, which would increase the number and scale of PFI projects.
Also, an increased number of projects would require more practical effort for the dissemination of
the PFI. This would include the need for support of the local governments. There would be many
challenges, such as providing expertise of the PFI to local governments, establishing organizations
that support a series of practical processes from planning to operating, and creating a system to
support the planning and operation of PFI projects.
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