Japanese City Said to Weigh $1.2 Billion Airport Concession Sale

Fukuoka prefecture on Japan’s southern Kyushu island is considering a sale of rights to operate the nation’s fourth-biggest state-owned airport, said four people with knowledge of the matter.

Proceeds from selling the Fukuoka Airport concession may top 120 billion yen ($1.2 billion), said two of the people, who asked not to be identified as the deliberations are private. Fukuoka’s city and prefectural governments are discussing whether to proceed with a sale, two people said.

Prime Minister Shinzo Abe’s government in June unveiled a plan to raise as much as 3 trillion yen over the next decade by selling rights to run airports and other public facilities. The sales are part of Abe’s efforts to reduce Japan’s debt and boost investment by private companies.

Japan has 27 state-run airports, the biggest of which is Tokyo International Airport, also known as Haneda.

Spokesmen for the Fukuoka government and the land ministry overseeing airport operations declined to comment.

Fukuoka, with a population of 5.1 million, would follow Sendai in Japan’s northeastern Miyagi prefecture in seeking money from an airport concession sale. The land ministry plans to hire a financial adviser early next year to oversee an auction for rights to operate the Sendai Airport, one of the people said.

Fukuoka Airport handled 17.4 million passengers in 2012, ranking it fourth among Japan’s state-run airports, according to the prefectural government’s data. Some 66.7 million people traveled through Haneda, more than double the number for the second largest, Narita outside Tokyo. New Chitose airport in Hokkaido was third with 17.5 million.

Second Runway

Fukuoka plans to spend 180 billion yen to build a second runway to meet an expected surge in traffic from Southeast Asia and China, according to the local government’s website. No timetable for completing the project has been set, the website shows.

Runway operations at state-owned airports are currently managed by the national government, while airport terminal buildings are operated by companies jointly owned by regional governments and private enterprises, according to the land ministry. Japan aims to combine runway and terminal operations and privatize them.

The upper house of the Diet in June approved legislation proposing to allow private companies to operate public airports.

To contact the reporters on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net; Emi Urabe in Tokyo at eurabe@bloomberg.net

To contact the editors responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net; Katrina Nicholas at knicholas2@bloomberg.net

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