Government drops plans to privatize three airports

The Land, Infrastructure and Transport Ministry on Friday dropped plans to simultaneously privatize three international airports after top officials at the three semigovernmental operators expressed conflicting views on the plan.

Under the initial plan, proposed in September 2001, the ministry recommended that a single entity be established to oversee the runways and three separate private firms be set up to separately manage the terminal buildings at New Tokyo International Airport at Narita, Kansai International Airport and the Central Japan International Airport.

The Central Japan gateway will be constructed off the Chita Peninsula near Nagoya and is scheduled to open in 2005.

Masahiko Kurono, chief of the New Tokyo International Airport Authority, told the hearing, “I want the government to privatize us into an independent entity to honor the independence of our management.”

But Yukihisa Hirano, president of Central Japan International Airport Co. — the corporate administrator of the airport, 40 percent of which is owned by the government — expressed reservations.

He said his company hopes that it will be able to “satisfy in the future the conditions that would make it possible for the government to sell its shareholdings in our company.”

Kiyoyasu Mikanagi, chief of Kansai International Airport Co. balked at the privatization on the grounds that it would be impossible for the company to single-handedly repay debts of over 1 trillion yen.

Mikanagi requested that the ministry stick to its initial plan to set up a single public entity to build and service all runways at the three airports so that revenues from all three facilities can be used to alleviate the huge initial cost. His request was turned down.

But it remains unclear when KIAC will be able to be fully privatized because of uncertainties about repayments of the 1 trillion yen debt, especially in light of the annual interest payment of 40 billion yen.

The ministry plans to present, possibly by the end of October, a specific plan to make the three firms into fully privatized companies, ministry officials said.

Land, Infrastructure and Transport Minister Chikage Ogi told a news conference that her ministry wants to make a decision on privatization by the end of this year.

As for Narita airport, the ministry plans to submit a bill to a regular Diet session next January that would turn the New Tokyo International Airport Authority into a special-purpose company whose shares are owned by the government.

After inaugurating the special-purpose company in fiscal 2004, the ministry envisions eventually selling 100 percent of its shares to the private sector.