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POLITICS

Gov’t to facilitate sale of infrastructure management rights to private sector

  • August 23, 2016
  • , Nikkei , p. 4
  • Translation

The government will encourage municipalities to step up their sales of management rights to infrastructure facilities, such as water supply and sewage systems and public housing complexes, to the private sector. Private sector access to infrastructure management is limited to certain fields, such as airports and ports. The government will facilitate the transfer of management rights from the public to the private sector by allowing local governments to repay long-term loans it extended at lower rates ahead of schedule. It has been projected that demand for many infrastructure facilities and systems will become stagnant due to the country’s depopulation. The government is hoping to maintain these facilities through efficient management by the private sector.

 

The measure calls for encouraging municipalities to repay the money they borrowed via the fiscal investment and loan program (FILP) ahead of schedule. The FILP is a lending scheme to finance low-interest money to projects that serve the public good and requires local governments to pay amounts equivalent to interest to the central government as compensation when they repay money ahead of schedule. The government will forgo this compensation payment for cases involving the sale of management rights of infrastructure facilities and systems to the private sector so local governments will be effectively exempt from repaying interest.

 

The government predicts that reducing the interest payment burden will help facilitate the transfer of management rights to the private sector. The efficient management of infrastructure facilities and systems by the private sector could help reduce costs and residents’ burden.

 

The Ministry of Finance, the Ministry of Internal Affairs and Telecommunications, the Cabinet Office, and other concerned ministries will discuss the matter and work out the details by the end of the year. The government plans to submit related bills to an ordinary Diet session to be convened next year. (Abridged)

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