The Ministry of Land, Infrastructure, Transport and Tourism (often abbreviated to MLIT or MLITT) is a Ministry of the Japanese Government, tasked with the development of national policy relating to the area of land use, infrastructure development, transport and tourism. The MLITT is a major ministry of the Japanese State, second in size to the Ministry of Defence. The Ministry is divided into numerous bureaus, which include, but are not limited to: government buildings, international affairs, regional planning, city development, roads, railways, rivers, civil aviation, ports and harbours, maritime, and coast guard.
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Japan’s New Kansai International Airport Company (NKIAC) president Keiichi Ando revealed the company has started considering foreign and domestic investors to manage the airports for 40-50 years. The company aims to raise USD7 billion to USD15 billion in the privatisation process. This could be the first of 29 airport privatisations there.
Mr Ando commented, “This is the first large infrastructure transaction in Japan and…if it succeeds, the government intends to privatise regional airports as well. In addition, there is also talk that it will be necessary to privatise infrastructure, such as toll roads,” Mr Ando said. The deal, which is expected to be completed in 2015, would involve private investors managing both the Kansai International and Osaka International (Itami) airports, whose managements were integrated into a new company this year to help offset Kansai’s enormous debt burden and in preparation for a privatisation procedure.
The new company is a wholly-owned one that owns the runways at the airports, the land assets of Osaka Airport and Kansai Airport's terminal building. After the successful integration of the management of the airports, the government now aims to sell the right to operate the airports to the private sector.
Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT), in a draft report, stated the rationalisation and reform of management of the 27 government-managed airports in Japan is to be made by FY2020. As part of this, during the phase one period, or the five years from FY2014, it is planned to contract out management of as many airports as possible.
As Korea’s Incheon Airport gears towards a partial IPO in 2011, the government has committed to an investment of KRW1.8 trillion in its third expansion phase. Meanwhile, in Japan, the focus is more on LCCs, which seem to be taking on a greater significance there than they have in the past and the preparedness of airports to handle them.
The Economist magazine has recently presented evidence in several articles that suggests the propensity for industrial and commercial intervention by the state in rich countries is increasing. It pointed to the Japanese Government’s desire to create a "Japan Inc", deepening the links between business and government, and the lavishing of money by the state on banks and carmakers in the US and Europe.
Japan’s MLITT is reportedly planning to propose cuts to the government’s domestic jet fuel tax under the national FY2011 budget. The tax was introduced in 1972, covering fuel purchased for domestic flights only. It has been fixed since 1979, at JYP26,000 per 1,000 litres.
Japan’s airline industry is under stress. That much is obvious from Jan-2010’s bankruptcy of the country’s iconic flag carrier. When Japan Airlines entered bankruptcy protection at the beginning of the year, the high cost of operations in the country was highlighted as a major obstacle to future survival. So, as well as pushing the airlines to become more efficient, the government came under pressure to remove some of the more obvious elements of that add up to an impossibly costly backdrop for JAL, All Nippon and a small secondary sector.