A casino, aquarium and hotel could be built at Sendai Airport as part of a land ministry initiative to harness private-sector funds to rebuilding public facilities damaged by the Great East Japan Earthquake.
A casino, aquarium and hotel could be built at Sendai Airport as part of a land ministry initiative to harness private-sector funds to rebuilding public facilities damaged by the Great East Japan Earthquake.
The 100 billion yen ($1.24 billion) plan, which has been submitted by a nonprofit organization, was one of about 60 proposals from private entities given to the ministry between late May and late June.
Projects that allow private funds to build and operate public facilities are common in many foreign countries. The land ministry wants to use similar mechanisms to access private funding for public projects both inside and outside the disaster zone.
Experts are expected to narrow down the proposals submitted to the ministry to several projects by August. The Sendai Airport plan is considered a leading candidate.
According to the nonprofit organization that submitted the plan, funds collected from major overseas investors and others would be used to rebuild the airport, whose runways and terminal building were flooded by the March 11 tsunami.
If a special deregulatory zone for the casino is approved, a large majority of the estimated cost of a little less than 100 billion yen would be covered by investment funds, according to the proposal.
Some flights have resumed at Sendai Airport, but extensive repairs are still needed.
The government is turning to investment funds because it is short of money and many airports across the world have already been privatized.
The ministry also plans to use private funding to rebuild ports, parking lots, housing, sewerage systems and commercial facilities in the quake-hit region.
It expects investment funds to put up a maximum of 40 percent of the cost of each project, with the remainder covered by loans from financial institutions.
The projects are expected to yield an annual return of 5 to 10 percent.
The ministry will assess the feasibility of the plans in the current fiscal year and will implement projects in fiscal 2012.
It is unclear how attractive the projects will be to private-sector investors. Restrictions on changing prices and falling populations in rural areas may affect the profitability of some projects.