Unofficial Translation:
Prepared by Toru Mihara
General Manager Project Engineering Dept.
Mitsui Global Strategic Studies Institute
Fundamental Policy with respect to Implementation of Undertaking of Public Facilities by utilizing private funds
- Integral text-
( Notice by Prime Minister’s Office Number 11, March 13 th , 12 th Year of Heisei)
Note :
Following translation is unofficial and does not count for specific legal consideration in view of Japanese administrative code. Some words in original legal text are employed under special meaning under administrative codes. For some portion, English translation is unable to reflect legal nuances involved. Readers of this paper should be aware that this English translation should not be used in determining or interpreting rights and obligations arising from the original legal text and advised to seek for expert legal counsels on Japanese administrative laws, if such is required
It is a mandatory policy requirement imposed for State, Local Autonomous Government, Chartered Corporation or other Public Corporations to realize social infrastructures efficiently as well as effectively to supply Public Services of high quality in order to realize a society where national citizen can really feel richness while facing coming ages of small numbers of children and aged society in this wake of 21 st century. For this purpose, it is being required to entrust to private enterprises the implementation of those Public Facilities by profiting to use private’s funds, managerial and technical skills, while considering efficient use of public financial funds and under appropriate allocation of roles and responsibility, for those undertakings which are judged to be appropriate.
The undertaking with respect to the realization of Public Facilities by utilizing private funds (herein after referred to as the PFI Undertaking) aims to implement an undertaking having public interest ( Principle of Public Interest ) by profiting to use private’s funds, managerial as well as technical skills ( Principle to Utilize Private’s Managerial Resources ) in an efficient and effective way by respecting independence, ingenuity and innovative ideas by private enterprises ( Principle of Efficiency ). While conducting selection of the Specified Undertaking and the Selected Enterprise, the procedures should aim fairness ( Principle of Fairness ) and the transparency should be secured for whole process from initiation of the Specified Undertaking until the end of such undertaking ( Principle of Transparency ). Further, while implementing the PFI Undertaking, objectivity for determination of evaluation shall be required at each step ( Principle of Objectivity ), it being mandatory requirement to clarify in writingcontractual substance like allocation of role and responsibility of the concerned parties ( Contractual Principle), securing at the same time, independence as a legal entity or independence as to accounting separation between department assuming the undertaking and its parent entity ( Principle of Independence ). It is preferable for the Administrator of Public Facilities etc, when he envisages to realize an undertaking for the purpose of supplying Public Services, to entrust its implementation to private enterprise as PFI Undertaking when it is judged that entrusting such to private enterprise would contribute to financial efficiency and amelioration of level of Public Service.
Steady implementation of the PFI Undertaking is expected to bring forth the following effects:
Firstly ,
It will enable to supply economical and better Public Services to national citizen. Achieving this aim is, from the beginning, an important theme for public sector.However in these years, financial circumstances of the State and Local Autonomous Government are very severe, requiring steady progress of financial structural reform, obliging them to profit to utilize experience and ability of private sector for realization of Public Facilities, based on background of accumulation of managerial know-how and progress of technical ability by private enterprise. Under such circumstances, if public services can be supplied by the PFI Undertaking, it can be anticipated that risk management of entire undertaking can be conducted efficiently by appropriate allocation of each risk. And in addition, the cost of the undertaking can be reduced through life cycle of the undertaking, as long as whole or a part of construction (including design and engineering), maintenance and operation will be treated as a package, thereby reducing life cycle cost of public financial burden. And simultaneously, this may allow realization of social infrastructure and supply of Public Services having high quality. By implementing this PFI Undertaking smoothly, the effects are anticipated to expand widely to other undertakings of Public Facilities through utilization of private’s ingenuity and innovative ideas.
Secondly ,
It will innovate ways of involvement of public administration in supplying Public Services. The PFI Undertaking aims to entrust as much as possible to private enterprise those undertakings of Public Facilities which are appropriate to be entrusted by respecting independence, ingenuity and innovative ideas of private enterprise. Through this, it is anticipated that such would ensure efficient usage of public financial funds and formulate new public-private partnership based on appropriate allocation of roles among them.
Thirdly ,
It will contribute to activate economy by creating business opportunities for private sector. The PFI Undertaking, in addition to have effects on creating new business opportunities for private sector as long as it aims to entrust to private enterprise those undertakings of Public Facilities formerly and mainly assumed by public sector like State or Local Autonomous Government, may also create new business opportunities by implementing such by combining with other profitable businesses.Further, by introducing new approaches such as Project Finance as funding method of the PFI Undertaking, it is anticipated that such would facilitate to ameliorate financial environment and that this may lead to creation of new financial market. As a result of these, it is anticipated to have effects to create a new industry and promote economic structural reform.
Based on acknowledgement of above, it is urgent policy theme for the State to promote to realize the PFI Undertaking which respects private’s independence, ingenuity and innovative ideas. It is required for the State and for the Local Autonomous Government to take measures, as delineated below, like financial supports needed, clarification of concordance with existing relevant laws and regulations and deregulation so that the Administrator of Public Facilities etc. can smoothly promote to implement the Specified Undertaking.
This Fundamental Policy, hereby defines fundamental policy with respect to implementation of the Specified Undertaking in accordance with Section 1, Article 4 of the Law on Promotion of Realization of Public Facilities by Usage of Private Funds ( Law Number 117 of 11 th year of Heisei, Herein after referred to as the Law) in anticipation of promotion of efficient and effective realization of social infrastructure through the fact that the Administrator of Public Facilities etc. would implement such PFI Undertaking based on a common policy. It is hereby understood that this Fundamental Policy will mainly define those PFI Undertakings which will be conducted by the State etc ( those who are defined in item 1 and item 3 of Section 3, Article 2 of the Law . Herein after the same) as the Administrator of Public Facilities. Simultaneously, it is requested that Local Autonomous Governments will make efforts to promote smooth implementation of the PFI Undertaking, in accordance with the provisions of the Law and by reference to the present Fundamental Policy.[1]
1 Fundamental matters with respect to the selection of the Specified Undertaking including those proposed by private enterprises etc :
1 General matters relating to the Specified Undertaking:
(1) While selecting the Specified Undertaking, criteria should be taken that construction, maintenance, management and operation of the Public Facilities etc be realized efficiently and effectively through implementation of such as PFI Undertaking. When evaluating this concretely, criteria for selection be taken for points such as being able to anticipate to minimize public financial burdens for life cycle of undertaking when level of public services is in identical level or to anticipate to increase level of public services when level of public financial burdens is in identical level.
(2) When calculating anticipated amount of public financial burdens, an appropriate adjustment shall be made by adjusting expenditures relating to public financial supports, revenue income such as tax revenue from private enterprises etc as long as such can be anticipated, thereby calculating full amount of future expenditures(expenditures which take into consideration of risks of variation of expenditures in a reasonable way) and anticipated full amount of public financial burdens and evaluate such by converting that to present value.
(3) The evaluation of level of public services shall better be conducted quantitatively to the extent possible. However, when evaluating aspects of level of public services which are difficult to assess quantitatively, qualitative assessment be conducted while securing objectivity.
(4) When the selection of the Specified Undertaking has been conducted, the results of such judgement shall have to be opened to public as soon as possible together with substance of such evaluation(including methods of evaluation and results when having conducted qualitative assessment in evaluating level of public services. Ditto for below), taking well into consideration of impacts toward selection of private enterprise and realization of Public Facilities etc. The same shall be applied even in case where judgement has been made not to select the Specified Undertaking as a result of objective evaluation on feasibility of the concerned undertaking after having established the Implementation Policy and having notified such to public.
(5) In addition to public announcement as described in above (4), detailed data with respect to result of evaluation for selection or non-selection shall be opened to public in an appropriate manner and under appropriate timing, taking well into consideration of impact toward selection of private enterprise and to implementation of realization of Public Facilities etc.
The State etc, under the purpose to promote active proposal from private enterprises which may be useful for promotion of the PFI Undertaking, shall take measures to meet with proposal from private enterprises, bearing in mind of the following ;
(1) The Administrator of Public Facilities etc shall positively take appropriate measures necessary such as organizing acceptance, evaluation, notice and public announcement of proposals initiated by private enterprises.
(2) When a judgment was made to be appropriate to implement a proposal initiated by private enterprise, the same procedures as the PFI Undertaking initiated by the Administrator of Public Facilities etc. shall have to be conducted for establishment of the Implementation Policy etc
(3) For proposal of undertaking initiated and proposed by private enterprise, if it happens that the establishment of the Implementation Policy could not be realized within a considerable period of time, the results of such judgement and its reasoning shall have to be notified as soon as possible to the party proposed such undertaking. Further, an outline of such proposed undertaking, a summary of results of judgement by the Administrator of Public Facilities etc. and its reasoning shall have to be opened to public in an appropriate way at appropriate timing.
2 Fundamental matters with respect to invitation to bid and selection of private enterprise
1 The State etc (the parties defined in item 1, section 3, Article 2 of the Law, Hereinafter the same) shall conduct selection of private enterprise in accordance with section 1 of Article 7 of the Law as well as opening to public of result of objective evaluation in accordance with Article 8 of the Law, bearing well in mind of the following:
(1) When conducting invitation to bid and selection of private enterprise, a consideration has to be made to secure competition based on Principle of Fairness and to maintain procedural transparency based on Principle of Transparency. In addition, a consideration has to be made to let private enterprise demonstrate its ingenuity and innovative ideas to the maximum extent possible, bearing well in mind of securing a time necessary to prepare such proposal.
(2) When conducting selection of private enterprise for the undertaking which shall be conducted based on a contract for which the State Accounting Law and relevant ordinances shall be applied, it shall be a fundamental principle to apply General Competition Tender method[2], in accordance with the stipulation of the State Accounting Law and relevant ordinances.
(3) When conducting a competitive tender and intending to proceed to selection based on price and other conditions in accordance with the stipulations of the State Accounting Law and relevant ordinances, objective evaluation criteria shall have to be established. When obliged to apply qualitative assessment for level of public services etc., objectivity should be secured by quantification of result of evaluation.
(4) Even in case where the State Accounting Law and relevant ordinances would not apply, competition shall have to be secured. In this case or in case where a private contract is to be envisaged, a condition shall have to be put to conduct objective evaluation in accordance with the intent outlined in above (3).
(5) When conducting an invitation for tender, it shall be a fundamental basis to demonstrate to the extent necessary level of public services to be supplied within the scope defined in the State Accounting Law and relevant ordinances, keeping minimum necessary to specify concrete specification of structures and construction etc.
(6) In addition to giving opportunities for questions to private enterprises, fairness should be maintained when supplying information to such questions in a way not to impede competitive conditions.
(7) When having selected private enterprise, that result shall have to be opened to public as soon as possible together with results of evaluation and data necessary to secure transparency of selection procedures in accordance with criteria for evaluation and method of selection (except those information which may impede proper interest of private enterprise like rights of private enterprise, position of competition etc.)
(8) When judgment is made not to select private enterprise and cancel selection of the Specified Undertaking after having invited private enterprises for tender and having done procedures with respect to the selection, such shall have to be notified to public by applying provisions of above 1 , 3, (4) and (5).
2 A Chartered Corporation or other Public Enterprises ( those who are defined in item 3, section 2 , Article 2 of the Law), when conducting selection of private enterprises etc. shall implement such appropriately and fairly by following the provisions of above (1) to (8) .
3 The State, with respect to objective criteria for evaluation, securing qualitative objectiveness etc described respectively in above 1(3) and (4), shall gradually have to fix administratively the method, procedures and standards and shall make efforts to envisage to increase transparency.
3 Fundamental matters with respect to securing appropriate and firm implementation of the undertaking like precision of responsibility of private enterprises
The State etc. with a view to secure appropriate and firm implementation of the Selected Undertaking, shall take measures with respect to precision of responsibility of the State etc and private enterprise, taking into consideration of the following:
1 The Administrator of Public Facilities etc. shall clarify concretely to the extent possible and within the Implementation Policy, involvement of the Administrator of Public Facilities etc., risks and their allocation with respect to the Selected Undertaking.
2 With respect to business plan or agreement etc ( Hereinafter referred to as the Agreement etc ), they shall have to be fixed bearing in mind of the following and the Agreement etc shall have to be opened to public ( except those which ,by opening to public, may impede proper interest of private enterprise like rights of private enterprise, position of competition etc. it being understood that such exclusion needs to be agreed upon in advance within the Agreement etc )
(1) The Agreement etc, having purpose to fix rights and obligations of the parties to the Agreement etc like responsibility with respect to the Selected Undertaking and allocation of risks, shall, to the extent possible, avoid ambiguity, fix such rights and obligations concretely and precisely.
(2) The Administrator of Public Facilities etc, within the Agreement etc., shall fix in addition to content and quality of services to be supplied by private enterprise, ways to measure level of services and methods of such evaluation, tariff and its calculation methods, details of obligations which both parties to the Agreement etc will assume and ways to perform such, describe appropriate and rational measures for curing the Selected Undertaking if and when the parties to the Agreement etc breach the provisions of the Agreement etc. as well as methods of curing defaults of obligations and measures with respect to remedy for the parties.
(3) The Administrator of Public Facilities etc, in order to secure supply of appropriate public services and considering to strictly minimize its involvement toward private enterprise, shall consider the following and should agree such within the Agreement etc.
(a). that the Administrator of Public Facilities etc. can monitor level of public services to be supplied by private enterprise.
(b) that the Administrator of Public Facilities etc. can request regular submission from the private enterprise of report on implementation status of performance of obligations under the Agreement etc with respect to the undertaking.
(c) that the Administrator of Public Facilities etc. can request regular submission from the private enterprise of financial reports which received an audit from publicly certified accountant (, limited to a scope which may affect implementation of the Selected Undertaking )
(d) that, when a circumstance occurs that may affect serious impacts to the implementation of the Selected Undertaking, the Administrator of Public Facilities etc. can not only request a specific reporting toward private enterprise but also request conducting of investigation by a third party expert and submission of such investigation report.
(e) that, in order to secure appropriate and firm supply of public services, provisions be described with respect to necessary and reasonable measures as well as remedies for the Administrator for Public Facilities etc.
(f) that involvement of the Administrator for Public Facilities etc beyond those contractual scope defined in the Agreement etc in accordance with above (a) to (e) shall be limited to reasonable scope necessary for securing appropriate and firm implementation of the Selected Undertaking like securing safety-security, inspection and monitoring for protection of environment etc.
(4) With respect to the allocation of risks of the Selected Undertaking, it shall be fixed , after clarifying to the extent possible anticipated risks, based on an understanding that the party best able to manage a risk shall assume allocation of such risk. On the other hand, risks which can be removed or mitigated by economically rational means, appropriate measures shall be taken and the relevant scope and content shall have to be described as concrete as possible within the Agreement etc.
(5) An ending term for the Selected Undertaking shall have to be clearly fixed and with respect to the treatment of assets of the concerned undertaking (at the end of such term), like handing over of land etc at the end of the term, the relevant provisions shall have to be concrete and clear enough to the extent possible, bearing in mind of economical rationality.
(6) The circumstances under which continuation of the undertaking becomes difficult shall have to be enumerated as concrete as possible and under the event if such circumstance occurs or likely to occur, the measures which the parties to the Agreement etc shall have to take shall have to be described concretely and clearly depending on existence or not of event whose responsibility is attributable. If and when a possibility exists to cure the undertaking and if it is rational to continue the undertaking, measures necessary to cure the undertaking shall have to be described concretely and clearly, depending on existence or not of event whose responsibility is attributable. With respect to securing supply of public services at collapse of the undertaking, provisions to secure appropriate measures shall have to be described including treatment of assets of the concerned undertaking as described in (5) above.
(7) With respect to events which may bring forth conditions for termination of the Agreement etc, the measures which the parties to the Agreement etc. shall have to undertake when such conditions or events would occur shall have to be described concretely and clearly, taking into consideration of above (5) and (6).
(8) Consideration has to be done to the fact that measures taken by the parties to the Agreement etc. as described in above (4) to (7) will largely influence amount, term cost and other conditions relating to funding for the Selected Undertaking, bearing in mind that such should be of an appropriate and clear content. Further, in case of rupture of the concerned Specified Undertaking, if it is judged to be appropriate that the Administrator of Public Facilities etc. and financing institutions would directly negotiate as to the undertaking and disposal of the assets, an appropriate agreement be considered beforehand depending on types of the concerned Selected Undertaking, while considering at the same time protection of rights owned by the financial institutions like securing their credit rights.
(9) In case where a structure of financing to be organized under the responsibility by private enterprise requests that a third party like financing institutions assumes succession of the Specified Undertaking, as consequences to the rupture by private enterprise, an appropriate agreement be established beforehand within the Agreement etc., to the extent that such is reasonable in view of securing continuous supply of public services in the light of public interests and fairness.
(10) With respect to procedures and measures etc to resolve any disputes which may arise due to doubts as to interpretation of the Agreement etc or to those matters which are not defined therein, such shall concretely and clearly be stipulated beforehand in the Agreement etc. taking well into consideration of reality of the concerned Selected Undertaking.
3 In case where the Selected Enterprise falls to be a legal entity where State or Local Autonomous Government has contributed its capital (including those entities which such entity has invested), the Administrator of Public Facilities etc . shall have to make specific consideration to maintain transparency toward the Selected Enterprise or to other interest stake holders with respect to substance of concrete and clear sharing of responsibilities.
4 The Selected Enterprise, when intending to be engaged in businesses other than the concerned Selected Undertaking, and if it is likely that risks pertaining to such other businesses may affect supply of public services relating to the concerned Selected Undertaking, appropriate measures be taken to avoid or minimize such influence like providing necessary provisions into the Agreement etc. Further, if and when the Selected Enterprise falls to be a newly established legal entity for the purpose of implementing the Selected Undertaking, a separate agreement shall be required between the Administrator of Public Facilities etc .and sponsors to the Selected Enterprise with respect to the measures necessary for securing appropriate and firm implementation of the Selected Undertaking, in order to dissipate concerns with respect to the implementation of the Selected Undertaking, bearing in mind of economic rationality.
4 Fundamental matters relating to measures concerning legal, regulatory and taxation regimes as well as public financial and monetary support:
1 With respect to measures relating to legal, regulatory and taxation regimes as well as public financial and monetary support relating to the implementation of the Specified Undertaking, the Government, in order to envisage smooth implementation of the PFI Undertaking, shall take appropriate measures based on the following fundamental understanding:
(1) With respect to public financial support, considerations shall be made so that private Selected Enterprise can enjoy such within the limit of those public financial supports which the Administrator of Public Facilities etc. can normally acquire.
(2) With respect to taxation measures, measures necessary for promotion of PFI Undertaking shall be examined, while considering existing regime as its fundamental basis.
(3) Consideration shall be made so that financing by Governmental Financing Institutions toward the Selected Enterprise be implemented smoothly in a way that positioning of the Selected Enterprise within the framework of financial support by Governmental Financing Institutions shall be clarified and arranged.
(4) Immediate promotion of abolishment or relaxation of regulations which are required for promotion of the PFI Undertaking be conducted with respect to individual business laws and laws on control of public goods etc, bearing in mind of intent of provisions of Article 17 of the Law. Further, based on a viewpoint that clarification of legal status of the Selected Enterprise is required, arrangement shall be made for its positioning under laws and regulations including interpretation and adaptation etc, of laws and regulations so as not to create any hindrance to the smooth implementation of the PFI Undertaking. In addition, with respect to the procedures relating to the selection of private enterprise, arrangement shall be made, taking into consideration of Article 3 of the supplementary provisions of the Law.
(5) With respect to letting State property be utilized by private enterprise free of charge or under price lower than that of market, concrete measures be established as soon as possible, bearing in mind of the intent of Section 1, Article 12 of the Law.
(6) Bearing in mind of the fact that profiting to use effectively and efficiently private’s funds under various ways, be it from capital or financing market, will benefit to the smooth implementation of the PFI Undertaking, consideration shall be made, while concluding Agreement etc. with respect to the Selected Undertaking, so as to enable the Selected
Enterprise smooth procurement of private’s fund under various means. Arrangement necessary for such environment shall be considered to this effect.
(7) If and when financing structure is that of Project Financing etc where the financing is mainly relying on to cash flow to be generated from the concerned Specific Undertaking and security over tangible and non-tangible assets of the concerned Selected Undertaking, arrangements shall be made for creating environment necessary for security regime etc. so that the parties to the Agreement etc. can determine rational and appropriate Agreement etc., bearing in mind of reality of such financing method.
(8) Usage of secured property be widely acknowledged, taking into consideration that , if and when property to be acquired for the purpose of conducting PFI Undertaking happens to be secured, any losses occurring to the secured party, party supplying security or to the owner of property can be allowed for depreciation of less than ten (10) ears after having been treated as deferred assets in accordance with Section 1, Article 20 of the Law.
2 The State etc., in order to facilitate examination by private enterprise for entry into the PFI Undertaking, shall have to clarify as concrete as possible within the Implementation Policy, the following:
(1) Permits, authorizations etc necessary for implementation of the Selected Undertaking as well as scope for operation, management and maintenance of the Public Facilities etc which the Selected Enterprise may conduct.
(2) Subsidies and institutional financing etc applicable to the Selected Enterprise.
(3) Preferential tax regime applicable
(4) Matters relating to letting the Selected Enterprise utilize State property free of charge or under price lower than that of market.
5 Fundamental matters with respect to the PFI Promotion Committee:
The PFI Promotion Committee (herein after referred to as the Promotion Committee), in accordance with Article 21 of the Law, shall have the following roles in cooperation with the Government, in order to promote implementation of the PFI Undertaking.
1 With respect to the realization of the Public Facilities etc of the State by utilizing private funds ( herein after referred to as realization of Public Facilities etc of the State) , the Promotion Committee shall conduct required investigation and deliberation with respect to implementation status and views from private enterprises etc. When the Promotion Committee judges it to be necessary for promotion of the PFI Undertaking, it shall present its views to the Prime Minister or to the Heads of the relevant administrative organs, conduct promotion and overall coordination of realization of Public Facilities etc of the State.
2 The Promotion Committee, together with the Government, shall recuperate information which may contribute to smooth implementation of the PFI Undertaking like information on PFI domestic or abroad, implementation status of the Selected Undertaking, laws and regulations relating to the PFI Undertaking, information relating to tax regime etc and distribute such widely to public in order to have understanding by national citizen on PFI Undertaking and for convenience by those parties who may be engaged in the PFI Undertaking.
3 In addition to present its views to the Prime Minister as described in above 1, the Promotion Committee, when the State intends to implement the PFI Undertaking and if a request was given for its smooth implementation, shall give appropriate advices with a view to envisage overall coordination of realization of Public Facilities etc of the State.
4 With respect to views, proposals and claims addressed by private enterprises etc with respect to the realization of Public Facilities etc of the State, the Promotion Committee shall receive such and if it judges it to be necessary for promotion of the implementation of the PFI Undertaking, it shall present its views to the Prime Minister or to Heads of administrative organs, in order to envisage promotion of realization of Public Facilities etc of the State and overall coordination.
5 The Promotion Committee , in order to deepen understanding by national citizen with respect to the activities of the Promotion Committee, shall make efforts to conduct public relations and assist the Government in public relations to be conducted by the Government, in order to deepen understanding of the PFI Undertaking by national citizen and to envisage smooth implementation of the PFI Undertaking.
6 The Promotion Committee, under the purpose of contributing to investigation and deliberation of each of above item, shall conduct analysis with respect to information recuperated on the PFI Undertaking and thereby conduct investigation necessary for promotion and implementation of the PFI Undertaking. Further, it shall conduct tasks necessary for promotion of implementation of PFI Undertaking arising from above activities.
6 Fundamental matters for implementation of the Specified Undertaking by Local Autonomous Governments :
Local Autonomous Governments, shall make efforts to implement smoothly the Specified Undertaking, by reference to matters in preceding Articles, paying attention to the following:
1 Supports :
(1) that, If judged to be necessary, it shall let private enterprise utilize public property during the term of the Selected Undertaking by free of charge or under prices lower than that of market.
(2) that it shall make efforts to secure funds necessary to support implementation of the Selected Undertaking or to conduct mediation to this effect
(3) that, based on the Implementation Policy, it shall conduct financial and monetary supports necessary toward the Selected Enterprise. Further, such supports toward the Selected Enterprise shall have to be flexible which conforms to characteristics of the facilities to be realized, implementing siting of the undertaking etc.
2 Deregulations:
Abolishment or relaxation of regulations proper to Local Autonomous Governments which may hinder application of skills, ingenuity and innovative ideas by private enterprise shall be promoted as soon as possible.
3 Promotion of PFI Undertaking :
(1) When conducting selection of the Specified Undertaking, evaluation and selection of private enterprise, fairness and transparency shall be kept.
(2) With respect to the various procedures necessary for implementation of the Specified Undertaking, such administration shall be done smoothly and it shall promote to envisage such.
(3) With respect to proposal by private enterprises, appropriate measures be conducted by properly arranging acceptance, evaluation, notice and public announcement of such.
(4) Gathering of information on PFI Undertaking shall be conducted. In addition, with respect to implementation of the Specified Undertaking, diffusion of knowledge and disclosure of information shall be conducted toward residents, while promoting enlightenment activities to obtain understanding and cooperation by residents.
(5) Appropriate considerations be made with respect to technical supports toward private enterprise. In addition, special consideration shall be made for coordination of usage of patented technology etc. and application of technology owned by private enterprise.
(6) When conducting acknowledgement of obligations based on the Agreement etc., it shall envisage to maintain its financial soundness and flexibility, aiming to minimize public financial burdens for medium-long term point of view, fully bearing in mind of reality of long term financial burden.
(7) While selecting a private enterprise, it shall make efforts to apply methods which shall fit to the reality of the PFI Undertaking like overall evaluation method, performance based ordering method etc., while at the same time securing competitiveness.
7 Other fundamental matters relating to the implementation of the Specified Undertaking:
1 The Government, under cooperation with the Promotion Committee, shall recuperate information which may contribute to the smooth promotion of the PFI Undertaking like information on PFI domestic or abroad, implementation status of the Selected Undertaking, laws and regulations relating to PFI Undertaking, information relating to tax regime etc and distribute such widely to public in order to have understanding by national citizen on PFI Undertaking and for convenience by those parties who may be engaged in the PFI Undertaking
[1]Thus, this Fundamental Policy is legally binding for State etc. but not for local autonomous governments who are requested to refer to this Policy as a reference.
[2]Defined term in the State Accounting Law.