Private finance initiative (PFI) has been
increasing the presence as an approach for the operation and maintenance of various
public facilities. The water business is basically managed on a stand-alone
basis with revenues from the users, and management approach prevailing in the
private sector like PFI is agreeable to the water business. However, PFI is introduced
mostly for the renewal and renovation of part of related facilities instead of the
whole of a water purification plant. In fact, PFI was introduced in major
prefectures including Tokyo, but it was mostly for effluent treatment
facilities and power generation facilities. This is presumably because of the
necessity to prevent PFI from getting involved in water quality management.
Design Build Operate (DBO), which covers
from facility construction to operational management, is an approach to cover
the whole part of a water purification plant. Two prefectures in Kyushu jointly
operate a water purification plant astride their boarder and entrust a private
company with the operation and maintenance. This is a good example of utilizing
the funds and initiative of the private sector, and a noteworthy example as a
method for wide area supply. DBO gives the same benefits as PFI except that
latter uses private capitals.
Both PFI and DBO are helpful to increase
operational efficiency and reduce operational cost with the help of clear burden
sharing between the public and private sectors and know-how accumulated in the
private sector. In addition, private companies can get business opportunities.
Lately, the situation is changing. PFI was introduced for several water
purification plants inside the same area and for the whole of a water
purification plant in Yokohama. The presence of the two approaches is expected
to increase with various arrangements and modifications. (To be continued)
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