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Third sector companies facing mounting problems

Date Posted: 2002-08-15

Of the 45 so called third sector companies operating in Okinawa Prefecture, 17 are facing mounting financial problems that are inviting questions of whether taxpayers’ money would be better used in other ways than propping up these companies that are looking more and more like white elephants.

The third sector companies are joint ventures between private enterprises and public entities such as the prefecture or the city. Such companies in Okinawa include Tomari Wharf and Tomarin Urban Resort in Naha City, Korinza Shopping Mall in Okinawa City, Naha Airport, Busena Resort Hotel in Nago City, Okinawa Monorail, Palette Kumoji in Naha City, Nago Paradise park.

According to Tokyo Shoko Research Co. the biggest money pit of Okinawa’s third sector companies is Okinawa Prefecture Livestock Breeding Bureau that is ¥288 million in red. Tomarin Hotel and Wharf lost ¥188 million last year and Korinza Shopping Mall sank ¥179.5 million more than it earned.

Tokyo Shoko Research concludes that had these companies been private enterprises, they had declared bankruptcy long time ago. But being able to tap into tax money, they are able to continue in business. However, the research company warns that these companies are becoming serious liabilities to cities and the prefecture that are backing them, and are draining money from other services that the local governments are required to provide.

This has also prompted the central government to issue a guidance calling for reorganizing the third sector companies in a way that reduces the public sector’s exposure and liabilities.

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