Japan starts Fukuoka Airport privatization

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Japan starts Fukuoka Airport privatization

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Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT) has announced that it has started a tender process to privatize the operation of Fukuoka Airport.

MLIT, with the aim of achieving the utilization promotion and service improvement of Fukuoka Airport by making full use of private know-how, has decided to outsource the operation of Fukuoka Airport to the private sector starting from April 2019, and has developed its “Application Guidelines” etc. which sets forth the outline of bidding and selection procedures. Application Guidelines etc. can be downloaded here.

The outsourcing of the operation of Fukuoka Airport is the private consignment arrangement of the third national airport, which is the largest-ever airport with about 21.37 million passengers in FY 2015. Japan is proposing a 30 year concession contract to run the airport.

Japan plans to use funds from the transaction to develop a second runway. The project involves the construction of a 2.5 km runway west of the current 2.8 km runway and establish such facilities as a landing area and a guide path. The government also aims to ease congestion at the airport and increase the number of visitors from overseas.

The runway project total investment is estimated at ¥180 billion (US$1.52 billion). According to sources, ¥120 billion (US$1.01 billion) of them are expected to be raised by selling the operation rights of the airport.

MLIT expects to select a preferred bidder around May 2018.

This is the third wave of airport privatization in Japan to date. As we reported in early March, ORIX Corporation - VINCI Airports consortium closed financing for the 44-year concession of Kansai International Airport and Osaka International Airport.

In September 2015 we informed that Japan selected a team made up general contractor Maeda Corporation and railway operator Tokyu Corporation as the preferred bidder for the rights to operate and improve facilities at Sendai Airport, which is Japan's 10th busiest airport.

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