actively promoted even before the PFI Act was established, and projects for developing welfare facilities that come with the rebuilding of public housing have been ongoing. On the other hand, examples of using PFI for maintenance and management of infrastructure projects like roads and sewage have been relatively few. The most common scheme type for PFI is the 'Service Purchasing Type,' in which the public entity will pay the private operator for the cost of developing the public facility as a fee (service fee) (Figure 2-2-3).

While working to reduce financial burden and stimulate private investment, in order to realize the maintenance, management, and upgrading of social infrastructures, we need to promote the PFI projects that are financially independent types that can recover the costs by an income of non-tax revenues (like collecting usage fees). Due to these circumstances, the initiatives have been working toward using the public facilities management rights system (Concession Method), which was introduced by the amended PFI Act established in May 2011. With the concession method, for public facilities that collect usage fees, the operation rights for the facility can be set (granted) to the private operator, while the public entity retains the ownership rights of the facility. The private operator can then set the service content and usage fee amount themselves, making it possible for the private operator to run the business with a high degree of freedom as a financially independent type of PFI. This method also decreases the financial burden on the public entity, as they will then be collecting the concession fee.

More specifically, the goal has been set to promote the scale of PPP/PFI projects to JPY12 trillion in the next 10 years (2013-2022), by expanding the number of projects for which concession method can be applied, according to the ‘Action Plan for the Drastic Reform of PPP/PFI’ established in June 2013, the ‘Japan Re-emerging Strategy,’ and the ‘Basic Policy for Economic and Fiscal Management and Reform.’ Based on all these policies set by the government, MLIT is working to support local governments and promote initiatives in each sector—airports, sewage, and toll road businesses of local highway public corporations—in which the concession method maybe implemented.

## (PFI Market Potential)

As discussed above, while the movement to use PFI in Japan is becoming more active, due to future expansions in the market scale of PFI, we must make efforts to diversify the providers of funding for PFI projects when necessary, and continue to develop a market environment in which necessary funds can be supplied smoothly.

Overseas, the infrastructure fund—which invests in infrastructure projects—plays an important role, and is seen as an attractive investment prospect for investors. The infrastructure fund refers to a financial instrument that collects capital from investors and invests in social infrastructures like roads, railways, airports, ports, etc., and the profit from the enterprise is distributed to investors. There are both funds that are listed on the stock exchange and non-listed funds that raise funds from institutional investors. Of listed infrastructure funds overseas, there are about 50 issued, and the market