TOKYO, Feb 4 (Reuters) - Mitsubishi Corp said on Wednesday it had become cautious about bidding for a licence to operate a major international airport in Japan due to the “challenging” list of conditions set by the government.
The trading firm was one of nine Japanese companies the government had shortlisted in December to bid for the concession to run Kansai International Airport. The government expects to raise at least $17 billion from selling the licence and the first round of bidding will close on Feb. 16.
This week, housing developer Daiwa House Industry Co , which had also been shortlisted, said it was not going to bid for the project.
Shuma Uchino, Mitsubishi Corp’s chief financial officer, said the company had become cautious about the bid because the conditions given to them to run the airport were “very challenging”.
“This is going to be a long term project. We are studying carefully how profitable this business is going to be,” Uchino told reporters.
He did not elaborate on the conditions set by the government. The winning bidders are expected to run the airport for almost 45 years.
Mitsubishi Corp is the only Japanese bidder that has airport investments. The trading firm last year agreed to run Myanmar’s Mandalay International Airport for 30 years. Mitsubishi is also bidding for the right to run Sendai Airport in northern Japan.
Other shortlisted bidders included Japanese financial services provider Orix Corp, real estate developers Mitsubishi Estate Co and Mitsui Fudosan Co.
Australia’s Macquarie Capital Group and Singapore’s Changi Airports International were among 11 airport operators which were shortlisted to bid for the concession.
The auction is part of Prime Minister Shinzo Abe’s bid to boost private-sector investment in Japan’s infrastructure and trim government debt. New Kansai International Airport Co, fully owned by the government, has more than 1 trillion yen in debt.
$1 = 117.8500 yen Editing by Miral Fahmy