Hiroshima Pref. selects Swing Co.as a partner for a joint venture for the management of water supply

19.Jun.2012

Japan’s first water supply PPP (public-private partnership) led by the private sector

On June 12, 2012, Swing Corporation won its bid to become a partner for a public-private joint venture that will work on the management of Hiroshima Prefectural Waterworks. Swing Corporation and the Hiroshima Prefectural Government will hold a 65% and 35% stake respectively in the new company, which is scheduled to launch the Japan’s first water supply PPP led by the private sector in April, 2013.

Background of the establishment of the public-private joint venture

The Hiroshima Prefectural Government is facing difficulties arising from a decreased water demand due to industrial structural changes and declining population, increasing demand for renewal of aging facilities, and potential decrease in engineering expertise resulting from the mass retirement of skilled engineers. In order to address these imminent issues and maintain a stable supply of reliable, safe, and high-quality water in the future, the Hiroshima Prefectural Government has decided to establish a public-private joint venture (stock company) to apply a private sector business approach to the management of water supply services.

Bidding to become a partner

In April 2012, the Hiroshima Prefectural Government invited proposals for a joint venture partner. As a result of the screening conducted by the “Review Committee for Public-Private Joint Venture Establishment and Management”, Swing Corporation won its bid to become a partner. The following elements of Swing Corporation’s bid favorably impressed the Committee and led to its acceptance.

Financial stability required for a joint venture partnership
Proven track record and reliability in the operation and maintenance of water supply facilities
Concrete proposals for emergencies, including cooperation with local companies and training that further ensure successful risk management
Proactive proposal that also provided for compliance measures, such as the establishment of a third party review committee

Future schedule

The public-private joint venture, which will carry out maintenance management, etc., of water supply facilities, is scheduled to be established in September 2012. In the immediate future, the public-private joint venture will prepare for a smooth launch as a designated management company of water supply services in the west of Hiroshima in April 2013. Discussions with the Hiroshima Prefectural Government on the management and operation of municipal water supply facilities are also to be held in the future.