OSAKA -- Osaka Gov. Fusae Ota said Tuesday the operator of Kansai International Airport in Osaka Prefecture could be fully privatized, either on its own or via a merger with another corporation.

Ota's comments mark the first time she has spoken of the possibility of fully privatizing Kansai International Airport Co., officials of the Osaka Prefectural Government said.

"It (a review on the management of the airport) is unclear at this moment, but the company cannot be abolished as it has already" run on a commercial basis, she told a news conference.

The governor has called for the company to integrate its business with the New Tokyo International Airport Authority, the operator of Narita airport in Chiba Prefecture.

Like the airport, the Kansai firm is struggling to stay afloat, with interest-bearing debts totaling some 1 trillion yen. The airport is owned by the central government, local authorities and businesses and conducts its business under the Commercial Code.

The airport, built on an offshore landfill site about 35 km southwest of downtown Osaka, opened in September 1994.

Excuses for Narita

The transport ministry has told the government's administrative reform promotion headquarters that privatizing the operator of Narita airport would make it more difficult to purchase land needed for the planned second runway, government officials said.

The ministry argued that privatizing the New Tokyo International Airport Authority would reduce its credibility with people holding land inside the airport site, who must be persuaded to sell to further develop the airport, the officials said.

The Land, Infrastructure and Transport Ministry made the point in a report submitted to the headquarters Monday. The ministry said the authority cannot be privatized unless it completes the planned 2,500-meter second runway. The ministry also said the authority promised local residents that the airport would be run by the public sector.

The authority said Monday it will open a 2,180-meter section of the second runway in April.

The authority is unlikely to complete the remaining section in time for the 2002 World Cup, to be cohosted by Japan and South Korea, due to protests from local residents and their supporters.

The airport, roughly 60 km east of Tokyo, currently has only one 4,000-meter runway. The second, shorter runway is designed to accommodate short-haul flights such as those to and from other Asian cities.

Meanwhile, the ministry said in the report that it wants Water Resources Development Public Corp. to remain a public body while continuing ongoing dam projects, the officials said.

It would take 20 to 30 years to fully privatize the water corporation, they said.