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

Appendix 3: Additional Risk Actualized Cases
[PFI | Third Sector] Hibiki Container Terminal Project
-- Business bankruptcy derived from the optimistic demand forecast
Implementation of the project of
Container Terminal by mixed scheme of
PFI and third sector
Project overview
Basics
Project period 25 years
Project method BOT
Corporate structure Financially free-standing projects
Selection Method Open-Application Proposal Method (Single Tendering)
Amount of the contract
-
(Capital of SPC: 3.85 billion yen)
● In May 2000, published project implementation policy and selected the preferred
negotiator. SPC was established in January 2004. Started business in April 2005.
● By the PFI project joined by a foreign company (PSA Singapore), it aimed to achieve
"quality and internationally competitive service, not losing to the major ports of Asia"
and "the cheapest port in Japan".
Unforeseen impact
● The amount of cargo handling was 5,823 TEU 28 in FY 2005 and 29,358 TEU in FY
2006, which was significantly less than the demand forecast (70,000 in FY2005 and
140,000 TEU in FY 2006)
● Reduced capital to ¥ 10 billion in response to the excess debt and the worse management
of SPC. The scope of the operator’s businesses was significantly reduced from a
centralized business to facility management business such as maintenance and inspection
of facilities of the terminal.
28 1TEU = 20-foot container
• Inadequate quantitative assessment
• Optimistic demand forecast
93
• The demand was significantly lower
than the initial estimation and an
investor’s management was
deteriorated
• Termination of the contract