"Japan's Kobe airport likely to generate high investment effect"

Tuesday, June 22, 2004

Kobe airport likely to generate high investment effect+
The Associated Press


KOBE, The offshore Kobe airport under construction for opening in fiscal
2005 is likely to generate a high investment effect, a governmental
panel examining the efficiency of pubic works projects said Tuesday.

The panel, which consists of external advisers, calculated the
cost-benefit ratio of the Kobe airport project in accordance with a
manual set by the Ministry of Land, Infrastructure and Transport.

The panel concluded that the cost-benefit ratio of the Kobe airport
project was 2.03, well above 1 which is generally required for public
works to be deemed efficient from social and economic perspectives.

In releasing cost-benefit ratios for other airports, the panel gave 1.3
for Shizuoka airport, which is under construction in Shimada, Shizuoka
Prefecture, and 1.9 for new Kitakyushu airport in Kitakyushu, Fukuoka
Prefecture.

The city of Kobe estimates that the airport is likely to generate 131.4
billion yen in benefits for the next five decades, including economic
benefits for passengers and other users and airport revenue.

The government panel calculated the cost-benefit ratio by dividing
estimated total benefits by estimated total costs which include land
cost, operational cost and maintenance cost, at about 64.6 billion yen
in total.

The total cost, however, excluded 250 billion yen needed for additional
operational costs such as land reclamation and new roads linking the
city to the offshore airport, and interest payments for loans.

The city plans to compile its final assessment of the airport project
based on the panel's findings and opinions of its residents.


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