In Japan, commissions for the design, construction, operation, and maintenance of general waste facilities have been outsourced to the private sector for the past ten years. This paper discusses the background behind this trend and other factors involved. Our results suggest that before the number of general waste facilities being put under PFI/PPP increases, the scheme needs further consideration with regard to factors such as monitoring systems, etc.

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Progress is being made on entrusting the management of MSW disposal facilities to the private sector in order to ensure more sustainable economic conditions for local governments, which are currently facing financial difficulties. In addition, there are cases where the management system is being changed over from conventional, short-term operation contracts to long-term, comprehensive management contracts to guarantee more efficient economic performance. This paper highlights important issues to be considered when such long-term, comprehensive management contracts are put into place.

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In order to secure renewable energy, Nagoka City Garbage Biogasification Industry has placed an order with a PFI for full entrustment of their plant, from planning and construction to operation and maintenance. Generating power from biogas fuel which dismantles and treats waste through methane fermentation makes good use of fermentation residual substance by producing electricity, thermal power and a treatment process for waste. The plant aims to become the nation′s largest eco-plant model and to contribute to a recycling-oriented society that is more ecologically friendly toward the local environment.

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Japan has recently witnessed rapid growth in the municipal solid waste treatment business using the PPP method. In particular, there has been an increase in DBO methods that do not require any initial procurement of money from private banks. Under such conditions, Gotenba City and Oyama Town municipal associations have chosen the PFI (BTO) method but with the stipulation that the DBO method is used, and have ordered their municipal solid waste treatment operations to be handled by private enterprises.
There are three strong points in this case. Namely, the range of business includes recycling of both incineration ash and fly ash by private recyclers. The string point of this business using private companies is expected to be able to promote economically-sound and stable recycling of incineration ash using the method, and thus lead to a solution regarding final disposal of MSW. The results of such competition would be that a VFM of 35 % could be achieved, which is much larger than expected.
However, there are those who are skeptical about whether private companies (SPC) can successfully continue this business model over longer periods of time (20 years). Due to certain risks connected to this business scheme, measures to hedge the obvious risks will be required. The most important point for gaining successful results from this business is the monitoring of business contents and the development of good partnerships between public and private sectors.

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Tesco has a long history of operating and maintaining waste treatment plants. The volume of municipal waste in Japan has recently decreased as a result of enforcement of the 3R concept. In order to maintain stable municipal waste treatment systems in the future, adequate charges to the beneficiaries may be required, even though most Japanese municipalities currently provide waste treatment services at no cost or for a nominal fee to residents. On the other hand, as municipal waste discharge is on the decline, the volume of incineration is accordingly decreasing. As far as efficiently using social infrastructures is concerned, it would be better if municipal waste incineration plants with spare capacities received the industrial wastes in order to help reduce charges to beneficiaries.

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