US$1.6 billion concession to operate Japanese airport awarded

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US$1.6 billion concession to operate Japanese airport awarded

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Fukuoka Airport HD Group has signed a Basic Agreement with the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) of the Japanese government to operate Fukuoka Airport, the principal airport on the island of Kyushu, in the south of Japan, under a concession contract.

The group comprises Fukuoka Airport Holdings Co., Nishi-Nippon Railroad, Mitsubishi Corporation, Changi Airports International and Kyushu Electric Power.

As well as the airport itself, the consortium will operate the associated air navigation facility, building and parking facilities and provide environmental protection measures. The total investment required by the concessionaire is estimated to be JPY180 billion (US$1.64 billion).

Fukuoka Airport is the fourth busiest passenger airport in Japan and, as of 2017, the fourth busiest single-runway airport in the world by passenger traffic.

Currently, the basic airport facilities, facilities for handling passengers and cargo and car parking facilities are operated by separate entities. MLIT believes that integrating the operation of these different facilities by one private partner will enhance the strategy and efficiency of the airport's operations and aid regional promotion and development.

As the operator, the consortium will facilitate the revitalization of the airport and its surrounding areas. The aim of the concession is to facilitate the transformation of Fukuoka into a key transport hub in the region, with the long-term aim of stimulating Kyushu’s economy through trade and business activities, through leveraging the airport’s city centre location as well as its geographical proximity to East and Southeast Asia.

The Basic Agreement prescribes that the consortium commence operation of Fukuoka Airport on 1 April 2019. The length of the concession contract is 30 years, with a 5-year extension option to cover force majeure risks.

The consortium was selected as the preferred bidder for the concession last month. As reported on this platform, applications to operate the airport were invited in May last year, with five consortia shortlisted in August. 

MLIT's beliefs on the operation of Fukuoka extend to other airports in Japan - in 2011 the Ministry announced that it would privatise all national airports by 2020. With only a few concessions awarded by the start of this year, in May MLIT announced the tender of a package of airport concessions - seven airports located on Hokkaido island, in the north - which included the third busiest airport in the country.

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