Japanese financial services company, Orix Corp and its partner, French construction and engineering firm, Vinci SA, have been awarded the right to operate Japan's Kansai International Airport for the next 44 years.
The US$18 billion deal forms part of the privatisation efforts by the Japanese government to reduce the country's massive debt and to attract investment to Japan. Earlier this month, Japan Post
has raised US$12 billion in a long-anticipated initial public offering (IPO).
The Orix/Vinci consortium was the only bidder for the Kansai rights as others were turned off by the airport's 1 trillion yen (US$8 billion) debt. The near to Osaka located airport serves as an international hub for All Nippon Airways, Japan Airlines and Nippon Cargo Airlines and also serves as the North Pacific regional hub for FedEx.
Targeting low cost airlines
In a statement, Orix and Vinci said they will form a company to run Kansai International airport as well as the smaller Osaka International Airport and start operating the airports from April next year.
The consortium will pay the Japanese government 2.2 trillion yen over 44 years. Additional cash will be paid if the company makes more than 150 billion yen in annual revenue.
The group said it is hoping to make the airport a hub for low-cost carriers and is planning a fourth terminal in addition to the third that is currently being built.
Orix and Vinci will each inject 32 billion yen for 40% stakes in the company while the rest will be held by more than 20 minority shareholders.
Nol van Fenema