According to Japanese government cabinet office, as of 2007, Japan’s public pension has 70 million members with more than $2 trillion asset. In addition to that, there are numerous enterprise pension systems of about $1 trillion asset in total. Such huge capital pool could give birth to a great infrastructure investor, but things don’t go like that so far. However, interests in overseas infrastructure investment are swelling among fund managers of pension systems, as more and more economic paper articles are telling its acute necessity and success stories.

Political leaders of emerging countries may know such huge money is pooled in this island country. They often appear on Nikkei, renowned Japanese economic newspaper all the businessmen here are reading, to appeal opportunities of infrastructure investment in their countries.
In mid November, an interesting interview article of Croatia’s president Ivo Josipovic was on Nikkei (16th Nov, 2010). The interview was held in President office of Zagreb, Croatia. He mentioned an investment opportunity on the port of Rijeka.

Wikipedia English version wrote on the port, “Rijeka is the largest port in Croatia. According to the Rijeka Port Authority, its total throughput cargo in 2007 was more than 13 million tons and is rapidly increasing.” President Ivo Josipovic insisted if Chinese or Japanese companies use Rijeka port, they could make shipping to EU 5 or 6 days shorter than the rout using Hamburg port. That will attract Asian manufacturers, if the fare is affordable.

 

 

 

 

 

 

The port of Rijeka has very similar positioning with the planned port of Dawei, Myanmar. ASEAN (Association of Southeast Asian Nations) countries are currently developing “Southern Economic Corridor” (SEC) connecting Ho Chi Minh City of Vietnam, Phnom Penh of Cambodia, Bangkok of Thailand and Dawei facing to Andaman Sea.

If SEC will be completed, logistics from China, Japan and Korea to India doesn’t need to go through Strait of Malacca. By SEC’s short cutting, exporters can reduce term of Ho Chi Minh – Chennai (India) transportation from 14 days to 10 days. If more advanced custom entry technology is applied, the result will be 8 days. For the reduction, development of a deep water port at Dawei is mandatory. Myanmar government willingly admitted Thailand’s largest constructor Italian-Thai Development to start development of a deep water port of $8 billion.

As to Rijeka port, World Bank already lent $156 million to the project. According to the bank,the future Rijeka port will generate annual revenue of more than €17 million. Detailed plan ishere.

Japanese fund managers of pension systems might invest in both ports, if comfortable vehicles are prepared by some talented entities…

Originally posted on Infrastructure Investment Journal authored by Daisuke Imaizumi, CEO of InfraCommons.