Japan mulls lease of Hiroshima airport

Three ongoing privatisation processes will see the government award operating rights for nine airports across the northern and southern parts of the country.

Japan’s Ministry of Land, Infrastructure, Transport and Tourism has kick-started the privatisation of Hiroshima Airport by launching a public consultation on investment intentions last Friday.

Hiroshima airport became the ninth airport currently under procurement through Japan’s Private Finance Initiative. The Hiroshima concession, which is expected to commence in 2021, has a 30-year contract, with the option to extend it by five years.

The Ministry also conducted a consultation of private investment intentions over this summer and has been working on the implementation policies and application guidelines for a package of seven airports in Hokkaido, northern Japan, and Kumamoto airport, on Kyushu island, in the southern part of the country.

During the consultation process for the seven airports in Hokkaido, 110 companies participated in the process, while Kumamoto airport attracted interest from 82 companies, MLIT said. The Ministry expects to choose preferred bidders for the two concessions within the next year

Last month, MLIT said it had shortlisted three out of five bidders during its first screening for the privatisation of Fukuoka Airport – a 30-year contract to run the principal airport on Kyushu.

However, the bidders were not identified in order to ensure a fair competition, MLIT said. The preferred bidder will be appointed by May next year. The market sounding for Fukuoka airport in July 2016 saw 104 companies expressing interest in the concession.

Over the last quarter, the Japanese government awarded two concessions for Kobe and Takamatsu airports, handing over operations from April 2018.

A consortium comprising Orix Corporation, Vinci Airports and Kansai Airports will run Kobe Airport for 42 years, under a $171 million contract, while Takamatsu Airport will be managed by a team comprising Mitsubishi Estate, Taisei Corporation, Pacific Consultants and Symbol Tower for up to 55 years.

There are four airports in Japan already managed by the private sector. Tajima Airport, which was taken over by Tajima Airport Terminal in January 2015, was the first one to be privatised. It was followed by a 44-year, $18 billion contract awarded to the Orix-Vinci pair to run the Kansai and Osaka international airports. There is also the Sendai Airport concession, awarded to a consortium led by Tokyu Corporation.