A study panel of the infrastructure and transport ministry has released a report on the privatization of 27 airports managed by the central government. At present, the central government usually manages aviation-related facilities, such as runways, at these airports, while companies set up jointly by local governments and private investors manage other facilities such as terminal buildings and parking lots.
There is a problem with this arrangement. Even if terminal buildings and parking lots make profits, the profits cannot be used to reduce landing fees. That's because two different management entities are involved. The arrangement has made it difficult for those airports to become attractive to airline companies.
Under the privatization plan, special-purpose companies will be set up to manage facilities directly related to aviation and other facilities. These companies will not buy the runways or other aviation-related facilities, but instead will be entrusted by the central government to manage them. Since they do not have to buy aviation-related facilities, their initial investments are expected to be lower than they would be otherwise.