Aeronautics, Space and Defence

March 2008

Gov't shelves plan to limit foreign stakes in airports
Hasty introduction of new rules would taint image as open nation The government is expected to approve a revised airport law, which does not include a cap on foreign ownership of Japanese airports, at a cabinet meeting this week. The Ministry of Land, Infrastructure, Transport and Tourism had been preparing to submit changes to the law governing airports to the current Diet session that included a clause for limiting foreign ownership to less than a third of voting shares. The government will remove this clause from the bill, heeding criticism that such a regulation runs counter to the nation's strategy of inviting more foreign investment. This, however, the about-face does not mean the government will abandon its efforts altogether. It will continue debating the matter while including a national security perspective, with a final decision to be made in or after 2009. Chief Cabinet Secretary Nobutaka Machimura and Land Minister Tetsuzo Fuyushiba met Feb. 27 afternoon to agree to the removal of the clause. A new version without the clause will be submitted for cabinet approval this week. The section capping foreign ownership was drawn up with Narita International Airport Corp., which intends to go public in fiscal 2009, and Japan Airport Terminal Co., operator of Tokyo International Airport at Haneda, which is roughly 20% owned by an Australian fund, in mind. But the move came under fire from Financial Services Minister Yoshimi Watanabe, former Chief Cabinet Secretary Yasuhisa Shiozaki and other officials. Fears have grown even among proponents that a hasty introduction of foreign ownership regulations would lead more overseas investors to view Japan as a closed nation. However, some foreign governments do take stakes in their airports to protect national security. The Japanese government has therefore decided to give itself more time to debate the issue. (Nikkei Weekly, March 3, 2008)