The government plans to facilitate Japanese companies' participation in management of infrastructure facilities exported overseas, such as railways and power plants, with measures to help them be involved in operation and maintenance of such facilities, The Yomiuri Shimbun has learned.
Specific measures may include the expansion of public financing and trade insurance, according to sources. The aim is to secure revenue opportunities by encouraging Japanese companies to be involved continuously in after-sales services, such as maintenance and inspection, for exported facilities and equipment by making use of their technical capabilities.
The new policy will be incorporated into the Export Strategy for Infrastructure Systems, a basic policy for the expansion of infrastructure export to be revised as early as in June, according to the sources. The government hopes to achieve economic growth by meeting the growing demand, mainly in emerging economies, for infrastructure management and maintenance services.
When exporting infrastructure, Japanese companies tend only to deliver facilities and equipment and build plants. In the future, the government will support them to be involved in the entire business operation from upstream to downstream, or from project planning, construction and delivery to management and maintenance, said a source close to the government.
More specifically, the government is reportedly considering expanding public financing via institutions such as the Japan Bank for International Cooperation (JBIC) to help reduce risks associated with investment in overseas businesses. Also, the government will look to improve the trade environment by concluding intergovernmental memorandums of understanding.
The new strategy will focus on assistance in four business areas in which Japan is strong: railways, electricity, information and communications, and health care. The government expects that Japanese companies will obtain infrastructure management rights through investment or by other means and be involved in facility operations and maintenance services.
For example, in electricity, not only will Japanese companies deliver wind power plants, but they will also engage in its operation and maintenance, which means selling bundled services ranging from power generation to power transmission and distribution.
In railways, the government plans to integrally sell development of areas surrounding stations and construction of station buildings' commercial facilities. There are also plans to sell service packages that include supply, operation and maintenance of train cars and training for station staff.
Last year, the law on promoting the entry of Japanese entities into overseas infrastructure markets was enacted, aiming to encourage independent administrative agencies and government-affiliated companies to enter overseas markets. With the law in mind, the government also is drawing up a strategy to make inroads into overseas markets in such fields as the construction of expressways and railways in cooperation with private companies.
The international competition for infrastructure export is intensifying. In 2016, Japan received orders totaling about 21 trillion yen. However, as Japan continues to face difficulties in exporting nuclear reactors, there remains a wide gap between the government's goal of receiving orders totaling about 30 trillion yen in 2020 and the actual situation.
The government intends to emphasize Japan's consistent involvement in the high-quality infrastructure it boasts in order to differentiate itself from China and South Korea, which both emphasize lower prices.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
