TOKYO, July 25 Japan will in October invite bids for the operating rights for a major international airport, an official said on Friday, in a deal expected to be among the biggest in Prime Minister Shinzo Abe's drive to draw private funds into public infrastructure.
The licence for New Kansai International Airport, which will be bundled with the operating rights for smaller Osaka International Airport, should fetch at least 2 trillion yen ($20 billion), Keiichi Ando, the chief executive of the government-owned New Kansai International Airport Co, told reporters.
The operating licence for both airports will be for 45 years and the auction is open to foreign and domestic investors, he added. The winner is likely to be announced by June next year.
The company, which runs both airports, will use the proceeds to repay its 1.2 trillion yen debt to the state, Ando said. New Kansai International Airport is a regional hub in Osaka bay and Japan's fifth-largest airport by passenger traffic while Osaka airport is smaller.
SMBC Nikko Securities, the investment banking unit of Sumitomo Mitsui Financial Group, and Citigroup Inc are among the advisers for the sale.
The auction is part of Abe's target to triple private-sector investment in Japan's infrastructure to 12 trillion yen over the next decade as he tackles bloated government debt. Last month, the government started the bidding process for the operating rights of Sendai Airport.
Earlier this year, an official at Goldman Sachs Group Inc said the investment bank was considering investing in Kansai airport.
Ando said he hoped Japan's three largest banks, as well as the state-owned Development Bank of Japan, would take part in the sale.
Mizuho Financial Group Inc will "positively consider" the auction, a spokesman said. Bank of Mitsubishi-Tokyo UFJ Ltd, the main unit of Mitsubishi UFJ Financial Group Inc, will consider providing debt finance, a bank spokesman said.
A spokesman for Sumitomo Mitsui Banking Corp, the main unit of Sumitomo Mitsui Financial Group, said the bank would make "serious efforts to respond to the needs of the sale".
A spokesman for the Development Bank of Japan was not immediately available for comments.
(Reporting by Junko Fujita; Editing by William Mallard and Miral Fahmy)