Toward Japan-US Infrastructure Cooperation Japan s contributions through extensive PPP experience and advanced maintenance technologies November 7, 2018 Yasuhiro Shinohara Vice Minister for International Affairs Ministry of Land, Infrastructure, Transport and Tourism Ministry of Land, Infrastructure, Transport and Tourism
Japan Government s Initiatives for PPP Promotion PPP/PFI Promotion Action Plan (revised in 2018) (Formulated at the Public Private Partnership / Private Finance Initiative Promotion Meeting on June 15, 2018) 1. Project scale targets 10-year project scale targets (2013 to 2022): Approx. USD 191 billion (1) Concession: Approx. USD 64 billion (2) Commercial facilities annexed/utilized: Approx. USD 45 billion (3) Public real estate effectively used: Approx. USD 36 billion (4) Other PPP/PFI projects: Approx. USD 45 billion * USD 1 = JPY 110 2. Focus areas and targets (concession projects, etc.) 1 road and 6 airport projects (2014 to 2016) Targets achieved 6 sewerage system projects (2018 to 2019) 6 public housing, 6 water supply system and 3 educational facility projects (2016 to 2018) 3 cruise ship passenger terminal and 6 MICE facility projects (2017 to 2019) 3 public hydroelectric plant and 3 industrial water supply system projects (2018 to 2020) 3. Promotion measures Promote project formation through local platforms Facilitate the commencement of PPP/PFI projects in regional municipalities with populations of less than 200,000 Promote PPPs in public real estate 1
PPP Initiatives across Japan (Airports) In operation *This speech will cover the airports denoted by large red dots on the map. (Airports) Working towards the commencement of operations (Roads) In operation (Sewerage systems) in operation (MICE) Working towards the commencement of operations (Sewerage systems) Working towards the commencement of operations Aichi Prefectural Road Public Corporation (from Oct. 2016) Maeda Corp., Mori Trust, Daiwa Lease, Daiwa House and Central Highway Sendai Airport (from Jul. 2016) Tokyu Corp., Maeda Corp., Toyota Tsusho Kansai & Osaka International Airports (from Apr. 2016) Kansai Airports Hamamatsu City Sewerage System (from Apr. 2018) Veolia Japan, Veolia Jenets, JFE Engineering, ORIX Corp., Tokyu Construction, Suyama Construction Takamatsu Airport (from Apr. 2018) Mitsubishi Estate, Taisei Corp., Pacific Consultants 2
Sendai Airport Project Sendai Airport has been operated by Sendai International Airport Co., Ltd. since July 2016 * Sendai Int l Airport Co., Ltd. was founded by Tokyu Corp., Maeda Corp., Toyota Tsusho and others Operated based on innovative ideas from private businesses improve public transport from the airport to areas in the Tohoku region outside Miyagi Prefecture., set up flexible landing fees, attract airlines by actively marketing the airport Main effects of the project Total passengers in 2017: approx. 3.44 million (record-high) International passengers in 2017: approx. 280,000 (75% up from 2015 before concession) Operating income for 2017: approx. USD 46.9 million (56% up from 2015 before concession) New passenger facility opened in Oct., 2018 just over two years after the project was initiated New passenger facility Here Here Source: Sendai International Airport Co., Ltd. 3
Texas High Speed Railway Project Overview 239 miles Dallas (Population of Greater Dallas: 7.1 mil.) Station to be constructed in Grimes County Route: Dallas Houston (Approx. 239 miles) Max. operation speed: 205 mph Travel time: Approx. 90 min. Operator: Texas Central Partners (TCP) *Private American company Start construction: 2019 Houston (Population of Greater Houston: 6.7 mil.) Texas high speed railway N700 Bullet Train (Central Japan Railway Company) Employment: 10,000 workers per year (during construction) Economic effect: $36 billion (accumulation of 25 years during construction and operation) Calculation by the operating private American company of the project 4
Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) The role of JOIN* is to provide funding and to bring Japanese knowledge, technology and experience - Hands On - to transport and urban development projects all over the world, by cooperating and sharing responsibilities with Japanese corporations. Major Activities - Equity investment with Japanese corporations as a partner - Hands On support - dispatching of executives, engineers, etc. - Negotiation with the governments and policymakers of the host country Project support in the US (1): Texas High Speed Railway Project Project support in the US (2): Sustainable Aviation Fuel Project Support Targets Transport projects Passenger and cargo transport by rail, road, sea and air Maintenance and management of rail, road, port, airport facilities, etc. Urban development projects Construction of buildings of housing, hotels, offices, etc. Operation and maintenance of parks, sewage works, etc. Related projects supporting above projects (Refer to Slide 4) Approved by MLIT on Nov. 21, 2015 / Equity investment by JOIN (fixed) USD 40 million Approved by MLIT on May 26, 2017 / Loan by JOIN (fixed) USD 14.9 million Approved by MLIT on Aug. 31, 2018 / Loan by JOIN (fixed) USD 90 million Company involved: Central Japan Railway Approved by MLIT on Aug. 24, 2018 / Equity investment by JOIN (fixed) approx. USD 8 million *Established on Oct. 20, 2014 Companies involved: JAL and Marubeni - This investment is the world s first commercial project to produce, deliver to airports and supply sustainable aviation fuel made from municipal solid waste. - Through this project, Japanese partners and JOIN support to form a sustainable aviation fuel business model and actively contribute to reduction of Green House Gus emissions in the international aviation sector proposed by ICAO. 5
Cost Promoting Strategic Maintenance Methods for Long-Life Infrastructures Reduction and Leveling of Life Cycle Costs by promoting long-life infrastructures based on preventive maintenance and by developing and introducing new technologies. * Preventive maintenance: A maintenance concept in which preventive repairs are carried out before damage deteriorates too seriously and required service levels are maintained. Preventive Maintenance Reduction and leveling of total maintenance costs Post-action maintenance management A Preventive maintenance management (total cost: A>B) Reducing Leveling Well-planned management Introducing new technologies B Time 6
Improving Maintenance Technologies to be More Competitive Conventional Methods Innovative Methods [Example] Inspection robots obtain a large number of images Images obtained are applied automatically to drawings on which bridge damages tagged 3-Dementional Model 7