Japan is moving ahead with plans to privatize its port operations, starting with the country's largest port, Tokyo.

Authorities have announced that the Tokyo Metropolitan government's Port and Harbour Bureau will privatize the Tokyo Port Terminal Public Corp by April 2008, said reports.

The public corporation handles over 70% of foreign trade container throughput at the port of Tokyo.

According to Aya Yoshioka, port promotion manager at the Port and Harbour Bureau, privatization will lead to improved efficiency.

One of the main aims, said Yoshioka, would be to free the corporation from regulations from central government to allow management systems to function more freely.

According to Lloyd's List, Yoshioka also said privatization would bring savings to the Port and Harbour Bureau.

“The system now legally provides for the Port and Harbour Bureau to grant loans without interest to the public corporation when it carries out facility improvement,” said Yoshioka.

“Through privatization of the public corporation, port and harbour improvement expenses can be limited. As a result the Bureau's loan burden will be reduced.”

Reports say that when the new owners take over in 2008, they will have about $53 million in contributions by the metropolitan government as start-up capital.

The public corporation will also transfer all its property to the new company in the form of in-kind contribution, then dissolve itself, reports added.

Yoshioka says that the Tokyo metropolitan government believes that privatizing the public corporation will make pier management more efficient, which will directly lead to strengthened global competitiveness.

Reports say that the port of Osaka is mulling a similar move to privatize.

Japanese officials recently warned that Japanese ports risked becoming feeder points for transshipment hubs outside the country.

Ken Abe, a deputy director at Japan's ministry of land, infrastructure and transport, said a growing volume of Japanese cargo was being routed through regional hubs, such as Busan in South Korea.

Abe blamed Japan’s expensive distribution costs and handling delays.