In the basic policy for future growth, the
Japanese government showed the resolution to promote active utilization of public
private partnership (PPP) for the strategic maintenance of social capitals. In
Japan, the government has been improving the system for the private-public
initiative in the water business. Private finance initiative (PFI) was
introduced in 1999, and the Ministry of Health, Labour and Welfare Ministry
allowed private companies to work on the maintenance of the water service in
2002. And private companies were allowed to take chare in the maintenance of
public water-related facilities in 2003.
The above modifications were introduced by
many water business operators nationwide, and they helped them strengthen their
business infrastructure. However, there are few cases that introduced PFI. This
is because local bonds are widespread as a favorable fund procurement method. However,
fund-raising by local bond will not be as favorable as in the past because both
the central and local governments have financial difficulty. In addition, the management
efforts of the public sectors alone are not enough to cope with the declining
demand due to decreasing population.
In the situation mentioned above, utilizing
private funds based on the cooperation between the public and private sectors,
such as PFI, will be indispensable. It is reported that the PFI promotion
committee set up in the Cabinet Office is discussing the introduction of the concession
system that private companies are allowed to get the right to operate the whole
of the water business. That is, the concession system is one step ahead of the
PFI and one step before the full-scale privatization. (To be continued)
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