Excerpt of New Growth Strategy (Approved in Cabinet Meeting on June 18, 2010) IV Tourism & Regional Revitalization Strategy

Based on the policies in the New Growth Strategy, the “Act on Promotion, etc., of Public Facility, etc., through Utilization of Private Finance, etc., (PFI Act)” was amended in May 2011. Under the PFI Act after amendment, facility operation by way of the concession method is now available, rented accommodations, vessels, airplanes, etc., were newly added to the target facilities, and the system which allows private operators themselves to plan PFI projects to propose to the government has been introduced.

According to the concession method, the operation right of a facility can be granted to the private sector over a long time without transferring ownership of the facility to the private sector, where the business operator can freely decide the actual services, usage fees, etc., of the facility. This allows the business operators to run the facility with high flexibility, realizing setting of lower fees and high-quality service through management efforts of the private sector.

High expectations toward private fund and know-how are also seen in the public opinion survey of this time, in

which the 45% responded “Introducing private funds is agreeable in consideration of severe public-finance conditions” and 30.7% responded “Agreeable as the concession method can promote use of know-how of the private sector” with regard to introduction of the concession method.

## (Realization of Concession for Kansai International Airport and Osaka International Airport)

As for Kansai International Airport and Osaka International Airport, New Kansai International Airport Co., Ltd., was established on April 1, 2012, which starts to operate both airports in an integrated manner on July 1, 2012. The company, by increasing the business value of both airports and realizing acquisition of the operation right of public facilities, etc., (concession agreement) as early as possible, aims at early repayment of the debt of Kansai International Airport in a steady manner and also aims at contributing to strengthening Japan's international competitiveness as well as revitalization of the Kansai regional economy through appropriate and effective use of the airports.

## (Promotion of Airport Management Reforms)

As for the national government administration airports (27 airports excluding Osaka International Airport), a report was also produced in July 2011 by the “Investigation Commission on Airport Management”. The report posed the following two problems: (1) As the incomes such as the landing fee are pooled and managed, no improvement is expected in management efficiency. (2) Because of separation of main operators, in which runways, etc., are managed by the national government, while the airport buildings, etc. are run by the private sector, integrated and agile operation of the airport as a whole has not been attained.

With an aim to solve these problems and to bring out the prime roles of airports to the full extent, the report emphasized the community-based airport management by realizing management by each individual airport, and at the same time, agile operation of each airport by integrating its management (including also that of airport buildings) by using business capabilities of the private sector.