UK lawyers are competing to work on projects worth an estimated £5.7bn a year following legislation which makes PFIs possible in Japan for the first time.
Law firms such as Allen & Overy and Linklaters, and accountants such as PricewaterhouseCoopers, and various banks have been advising the Japanese government for two years on how to create a framework for PFI deals.
Now a bill has been passed making it possible and will come into force at the end of the year.
But UK PFI lawyers are already hoping to dominate the new market.
Aled Davies, a PFI specialist in Allen & Overy's Tokyo office, says: “We have looked at specific deals, most recently a waste-management plan.
“Most of the deals are about £50m now, but they will get much bigger with time.”
Linklaters is planning a Tokyo expansion to cope with the predicted PFI boom.
Leading PFI partner Stan Gniadkowski of Wilde Sapte says: “The growth potential is one billion yen a year.”
He adds that the Japanese government is offering excellent terms for investors in PFIs.
Government support for private companies investing in PFIs includes temporarily paying the companies' debts, such as rent and fees, providing free or cut-price properties and land, offering interest free loans, abolishing regulations that hinder PFIs, and providing other legal, tax and financial measures to encourage private investment.
Davies says: “This shows the Japanese are committed to PFIs. It is remarkable how far they have come in two years. I think economic problems in Japan have been the driver behind this.”
Gniadkowski says: “There should be a lot of work there for UK lawyers and contractors. UK lawyers are the world leaders in PFI. It is the most developed here.”
He says the PFI concept is essentially a western idea based on English common law principles. He adds: “English firms are going to be looked at first as being able to offer the cream of legal advice.”
Linklaters' head of global projects, Alan Black, says: “I hope it is going to be a very good source of business.
“We are expanding our Tokyo office on the projects side to do this.
“Projects are a key part of our future as a firm, and they spin off lots of business for other departments like banking.”