One of the major efforts is the privatization of Sendai Airport, which was badly affected by the disaster.
A year after a massive earthquake and tsunami devastated the northeast region of Japan, the process of rebuilding is well under way. Daisuke Nakayama, senior consultant in our Infrastructure PPP Advisory Group in Japan, says that infrastructure development characterized by swift and appropriate cooperation between public and private holds the key to sustainable recovery.
In February 2012, the Japanese established the Reconstruction Agency to develop basic recovery strategies that enable appropriate coordination among relevant policies.
At least ¥23t over 10 years from national and local budgets is estimated to be required for rebuilding efforts. Yet, the only resource currently available is the newly created reconstruction bond, the minimum purchase requirement of which is ¥10,000 (US$129).
Therefore, the Reconstruction Agency is searching for other sources of funding, including private capital-based funds, public-private partnerships (PPPs) and private finance initiatives (PFIs) are now coming to the fore. Voluntary contributions from private and public sectors for educational support are also being encouraged.
For example, one of the major efforts is the privatization of Sendai Airport, which was badly affected by the disaster. Under the proposal, the Government would retain ownership of the land and buildings, while private firms would oversee the runways, terminal facilities and parking areas.
Although the scheduled date for completion of the transfer is not until 2014, the necessary investments from private companies and financial institutions are already being formulated.
The Japanese government is taking an active role in this process since this project is likely to be a pilot infrastructure PPP project, and key to PPP market development in Japan.
Japan's journey back to prosperity is far from complete, but these ideas and projects demonstrate to Japan and the world that there is light at the end of the tunnel.
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