Public-Private Partnership Businesses that Achieve Both Profit and Public Interest—Towards Realization of a Sustainable Business Model

Akimitsu Ogasawara, who works in the Business Production Division, is involved in the development of public-private partnership projects. He is responsible not only for planning, concept design, and production, but also for business operations, and has boldly tackled the creation of unprecedented business schemes. Looking back on the major projects he has worked on so far, he will talk about his passion for public-private partnerships.

Participated in PFI business as the first representative company. Urban development with public-private unity aimed at public-private partnership

The Business Producing Headquarters is responsible for creating new business schemes for sustainable business operations that transcend the boundaries of existing business domains. In particular, the Public-Private Partnership Project Development Department is promoting efforts to formulate projects in collaboration with the public and private sectors and turn them into businesses. Ogasawara belongs to the PFI section. I am mainly in charge of public projects that utilize private funds and technology.

Ogasawara: "PFI stands for Private Finance Initiative, a method that utilizes private funds and expertise to design, construct, maintain, and operate public facilities. Currently, we are working on the '(tentative name) Shizuoka City Ocean and Earth Comprehensive Museum Development and Operation Project.' This project aims to create a new 'comprehensive museum about the ocean and the earth,' combining the functions of an aquarium and a museum, in a corner of Shimizu Port in Shizuoka City. This is our first time participating as the lead company in a PFI project."

Our role will be displays production and operation. We have been involved in the operation of public facilities since around 2001, but this is the first time we are trying to cover almost all of the operating costs with admission fees. A major characteristic of this PFI project is that the private sector is taking on the revenue risk of operation."

When implementing a PFI (Private Finance Initiative) project, it is common practice to establish a Special Purpose Company (SPC). In this case, together with the companies participating in the project, NOMURA Co.,Ltd. became the representative company and established "Shizuoka Marine Culture Network Co., Ltd.," and Ogasawara has been appointed as Board Directors of this company.

Ogasawara: "In PFI projects, the Special Purpose Company (SPC) raises its own funds and uses the service fees and admission fees from the city to repay loans, or to outsource work to the various operating companies that make up the SPC. NOMURA Co.,Ltd. is the representative company and shareholder, as well as a contractor that receives the outsourcing."

The business concept is “a campus for everyone connected to Suruga Bay”. Together with universities and national research institutes, we aim to create a facility that conveys the joy of exploring the connections between the global environment, the ocean, and people.

Ogasawara: “Like a university campus, learning and academics will be the axis, and the people who gather there will become the center of the city’s activity. We plan to conduct business activities with that concept. In cooperation with Tokai University, JAMSTEC (Japan Agency for Marine-Earth Science and Technology), and various other people involved in the ocean, we would like to promote projects such as research, exchange, creation, and dissemination, and build a base for marine culture through public-private unity. I think"

The goal of this project is not just the success of the facility itself. The ultimate goal is the realization of “Shimizu, an International Maritime Cultural City”.

Ogasawara: “This project is based on a redevelopment plan for the wharf area where the facility will be built. This facility is positioned as a leading project to restore the bustle of the town. Our biggest mission is to boost community development.”

A new business found in outsourcing the operation of public facilities. Coming up with a scheme as a milestone

▲ Tokyo Water Science Museum | The powerful “Mizuno Tabi Theater” surrounded by 4-screen images

Ogasawara says she became interested in social education facilities like museums because her father was researching museums. After studying broadcasting technology at university, she chose to work NOMURA Co.,Ltd. because she wanted to be involved in a wider range of forms of expression.

After joining the company, I was assigned to the Cultural Environment Division, which I had hoped for. After being in charge of corporate museums, I was involved in the Water Science Museum of the Tokyo Metropolitan Government Bureau of Waterworks.

Ogasawara: "I took on the role of leader in a project to completely renovate the facility, and I was in charge of project management. Initially, we were only undertaking the usual displays work such as surveys, planning, concept design, construction, etc., but later I had the opportunity to propose a scheme of comprehensive management outsourcing, which involves entrusting the management and operation of the facility to a single company."

At the time, there were no precedents for undertaking operational tasks under such a scheme. The challenge was how to ensure incentives for the service provider and how to encourage their creativity and ingenuity, even though it was a form of outsourced work.

We went through a lot of trouble, including running numerous simulations, but we were able to win the contract by planning events and public relations measures to be implemented as part of the operational work, and proposing how to expand the number of visitors to the facility."

For Ogasawara, this event will be a great source of inspiration for the promotion of subsequent projects.

Ogasawara “For example, I learned that I could get exposure even with a limited budget by planning an event related to Water Day, putting out a news release, and getting reporters to visit. We were able to make a difference, and I think it was very important that we were able to experience a series of processes for attracting customers that we hadn't put much effort into until then."

Leading the industry's first DBO business in the field of educational facilities. Rewards from a difficult project

▲Hamamatsu Science Museum "Mirai-La" | Mirai-La Core, where the science show is held

After that, Ogasawara became the chief. I was put in charge of project management for large-scale cultural facilities, and one of the most challenging projects was Hamamatsu Science Museum Miraira.​

Ogasawara: "We were solely responsible for the design, construction, and operation of displays renovation for a large facility with a total floor area of over 6,000 square meters, and we completed everything from schematic design to completion in a short period of about a year and a half."

In the case of facilities like these, where the local government is the main implementing body, it usually takes at least three years, and sometimes as long as ten years. In that context, since we were also undertaking management and operation as the designated manager, it was necessary to proceed with the operation plan and design work simultaneously."

At the time, securing a proposal using the so-called DBO method (*), where a private company comprehensively undertakes design, construction, and operation, in the field of educational facilities was an industry first. With no internal expertise in this area, Ogasawara, who led the project, was once again forced to learn through trial and error.

Ogasawara: "When creating a museum, the general process is that the administration and the curators in charge of operation first decide on the direction of the facility, and then we propose displays spaces based on that. However, because we were short on time and the operational plan and displays production were proceeding simultaneously, the operations team and displays production team within the company were giving way to each other, and the project was stalled for a long period of time."

Therefore, I decided that I should take on a producer-like role and oversee the project, so I enlisted the help of the department head at the time to set the overall concept. I then divided that concept into the software (operations) and hardware (displays production) teams and brought the project together.

While this method is commonplace now, at the time, NOMURA Co.,Ltd. had almost no precedents and was essentially feeling its way through the process. We needed to consider a wide range of business areas in parallel while ensuring consistency."

Ogasawara successfully led the design, construction, and operation of the project in a short period of approximately 17 months. While acknowledging that there are still areas for improvement, he says he felt a great sense of accomplishment through the project.

Ogasawara: I believe that it is the charm of the people who run the facility that attracts visitors and leads to repeat visitors. With that in mind, we placed the show space, which is often built in a corner of the facility, right in the center of the Hamamatsu Science Museum, and designed it so that the stage could be seen from anywhere.

This kind of planning approach was born precisely because the prospective operators were involved from the design stage. I believe we were able to realize displays space that is unique to the DBO (Design-Build-Operate) method."

* DBO (Design, Build, Operate): A public-private partnership model in which the public sector provides funding and comprehensively contracts the design, construction, maintenance, and operation to a private company.

Establish a business scheme that is beneficial to both the public and private sectors. Motivation in the fields of education and child-rearing

At the forefront of public-private partnerships, Ogasawara has chosen to take operational risks willingly and has taken the lead in expanding the scope of its business. We will continue to maintain that stance.

Ogasawara: Currently, the contracting business in fields such as commerce and events is in an oligopoly state, and we are falling into price competition. I think we need to actively participate.

Nonetheless, as the declining population becomes a social problem, businesses that benefit only private businesses are unsustainable. I would like to improve the quality of our services by devising a monetization scheme in which both citizens and citizens can share risks and returns.

Especially in public works, precedents are emphasized. Since this is not a field in which we can expect large profits, our current goal is to first accumulate experience so that we can control risks well. I believe that by accumulating results in this way, we will be able to become an irreplaceable company.”

Until now, Ogasawara has demonstrated its presence in the area of public cultural facilities. He says that he would like to expand into the fields of education and child-rearing in the future, using the experience and knowledge he has cultivated there.

Ogasawara: As the number of dual-income households has increased, children are spending more and more time alone. I would also like to be involved in on-site reforms.

In addition, as parents go out to work, the local community is being diluted. We are currently trying to incorporate into the park business a system that allows parents to exchange information on holidays, and I would like to take the initiative in socially good initiatives to solve such social issues.”

Turning company profits into the benefit of customers and society—as we enter an era of public-private collaboration in urban space development, a new chapter in public-private partnerships is about to open for Ogasawara and NOMURA Co.,Ltd., who have always aimed to create better spaces and towns.