May 22, 2015 / 11:26 AM / 4 years ago

UPDATE 1-Orix only confirmed bidder for Kansai airport rights after more drop out

* Four additional firms drop out of bidding

* Orix has partnered with France’s Vinci to bid (Adds other bidders, details throughout)

By Junko Fujita

TOKYO, May 22 (Reuters) - Orix Corp and partner Vinci SA are the only firms to have placed a confirmed bid for $18 billion rights to run Japan’s Kansai International Airport after people involved in the process said four additional companies including Mitsubishi Corp had dropped out.

A tepid showing for the marquee project on the last day of bidding may bode ill for Prime Minister Shinzo Abe’s effort to involve private companies in major infrastructure projects.

The auction for the rights to run Japan’s fifth-busiest airport was meant to start a wave of public-private partnerships to attract investment to Japan, chip away at the government’s massive debt and introduce more market rigour to infrastructure management.

Nine Japanese companies were approved as bidders, but they had balked at the 2.2 trillion yen price tag for debt-laden Kansai, which is six times that of a comparable 2013 deal for airports in Portugal.

The Kansai sale, which includes the operations of smaller Osaka International Airport, will also saddle investors with nearly $10 billion in debt which was run up after planners found the airport’s artificial island was sinking into Osaka Bay and had to be shored up with a massive retaining wall.

Japanese financial services firm Orix and French construction firm Vinci SA submitted their bid on Friday, a spokesman for Orix said.

But trading house Mitsubishi Corp as well as developers Sumitomo Realty & Development Co and Mitsui Fudosan Co dropped out on Friday, the sources said. The people spoke on condition of anonymity as they were not authorised to talk to the media on the matter.

Railway operator Tokyu Corp considered bidding but dropped out after it could not find a partner, a spokesman said.

The deal could go through with a single Orix-Vinci bid, but awarding the 45-year contract with no competition would be an embarrassment for the centrepiece project in Abe’s promise to triple private money in infrastructure projects to 12 trillion yen over the next decade.

Daiwa House Industry Co had already dropped out, as had Nippon Life Insurance Co, although the insurer said it might be a financial investor. Mitsubishi Estate decided not to be a sole bidder but may consider joining a consortium formed by the winning bidders, a company spokesman said.

A spokesman for trading house Marubeni Corp, one of the firms which had been approved as a bidder, declined to comment. (Reporting by Junko Fujita; Editing by William Mallard and Edwina Gibbs)

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