What Is a Park-PFI Feasibility Study? Business Scope, Deliverables, and Cost Overview [2026 Edition]

When a local government begins exploring the introduction of Park-PFI (the Public Solicitation Management System), it typically faces an immediate question: where to start. Even with a clear understanding of how the system works, municipalities cannot proceed to solicitation without first knowing whether Park-PFI is viable for their specific park, what conditions to set, and whether private-sector operators will actually participate.

A Park-PFI feasibility study (hereafter "feasibility study") is the commissioned advisory engagement that builds this decision-making basis.

The feasibility study is a consulting and research service contracted to an external PPP specialist consultant or design firm. While the specific scope and depth vary by project, the standard deliverable set consists of four items: a final report, a solicitation guideline draft, an evaluation scoring table, and a risk allocation matrix.

The study period is typically six to twelve months. During this period, the consultant conducts site analysis, administers a market sounding (sounding-type market survey), designs the business scheme, and drafts the solicitation documents.

As of March 31, 2025, 165 parks nationwide have adopted Park-PFI, and each of these adoptions was preceded by a feasibility study. The quality of the solicitation is directly determined by the quality of the study.

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A feasibility study is typically structured around six sequential phases. Because each phase builds on the outputs of the previous one, the design of the sequence and timeline is critical.

Phase 1: Site Analysis and Project Condition Assessment

The first phase involves a multi-dimensional analysis of the target park.

Key analysis items include the following:

• Locational characteristics (catchment population, transportation access, relationship to surrounding facilities)
• Park facility inventory (existing site coverage ratio, deteriorating facilities, utility infrastructure locations)
• Usage data (annual visitor count, visitor demographics, seasonal variation)
• Land use constraints (zoning category, Building Standards Act restrictions, landscape regulations)
• Fiscal context (current maintenance costs, consistency with capital improvement plans)

The deliverables from this phase are a "site analysis sheet" and a "project barrier assessment." These serve as the foundational reference materials for the sounding documentation and guideline draft in later phases.

The estimated duration is one to two months. In some cases, this phase reveals that the park is not suited for Park-PFI — identifying this early is itself an important value of the feasibility study.

Phase 2: Market Sounding Design and Administration

The market sounding is the most critical phase of the feasibility study. By gauging private-sector interest and understanding operator requirements before designing solicitation conditions, municipalities can significantly reduce the risk of receiving zero bids — the most common form of solicitation failure.

The MLIT guidelines revised in 2025 recommend implementing sounding in two stages: one at the concept phase and one at the scheme development phase.

• Round 1 (Concept Phase): Aimed at confirming market viability and gathering ideas. The municipality presents park overview, plans, current site coverage ratio, and proposed treatment of existing facilities, then solicits operator feedback.
• Round 2 (Scheme Development Phase): The draft solicitation conditions are disclosed, and operators are asked to confirm their intent to participate and their key requirements. Feedback on usage fee levels and required park facility improvement costs is also collected.

The Koriyama City Kaiseizan Park case took this further with a three-stage design: Trial Sounding (experimental use) → Pre-Sounding → Market Sounding. This progressive official-private dialogue enabled the solicitation conditions to be calibrated based on a precise understanding of operator needs.

The consulting firm's work during this phase includes:

• Drafting the sounding procedure and invitation materials
• Recruiting participants (through open solicitation or targeted invitation)
• Managing individual interviews or briefing sessions
• Compiling results (number of participants, key opinions, implications for solicitation conditions)
• Preparing a summary for public disclosure

The estimated duration is two to three months (from design through results compilation).

Phase 3: Business Scheme Design

Using the sounding results as a foundation, this phase designs the structural framework — or "blueprint" — of the project: who pays for what, how, and under what conditions.

Key considerations include:

• Defining the scope of publicly solicited park facilities and designated park facilities
• Designing the cost-sharing structure (the ratio of public versus private burden for designated park facility improvements)
• Setting the installation management permit term (within the 20-year maximum, considering investment payback period)
• Deciding whether to combine with the Designated Manager System
• Setting usage fee levels (consistency with the minimum fee established by municipal ordinance)
• Establishing a basic risk allocation framework (for business failure, facility damage, natural disaster, etc.)

In the Kaiseizan Park case, the cost-sharing structure for designated park facility improvements was set at a maximum of 90% public funding and a minimum of 10% private burden. This ratio was a deliberate design decision to lower the barrier to private participation, and it represents one of the most consequential decisions made during the scheme design phase.

Estimated duration: one to two months.

Phase 4: Drafting the Solicitation Guideline

The most practically valuable deliverable of the feasibility study is the draft of the solicitation guideline.

The solicitation guideline is a legally mandated document under Article 5-2, Paragraph 2 of the Urban Park Act, with mandatory content items defined in Clauses 1 through 10. The consulting firm drafts this legal document based on the outputs of the site analysis, market sounding, and scheme design phases.

The main content items are as follows:

Once the guideline draft is complete, the municipality has documents in a state ready for solicitation. This is typically the most time-intensive and cost-intensive phase of the feasibility study.

Estimated duration: two to three months.

Phase 5: Evaluation Criteria and Scoring Table Design

Concurrent with or following Phase 4, the evaluation scoring table is designed.

The scoring table defines the substantive competitive conditions of the solicitation, and its design quality directly determines the quality of applications received. The MLIT guidelines identify six evaluation items, but the weighting of each item and the definition of sub-criteria are determined by the municipality.

The Kaiseizan Park scoring table was structured as follows:

Kaiseizan Park adopted a 500-point evaluation system with an additional 8-point incentive for sounding participation. A minimum threshold was also set: total scores must reach at least 60% of the maximum across all evaluators, with each major category also meeting 60% — ensuring a baseline quality standard.

The incentive structure for sounding participation — 5 points for Trial Sounding and 3 points for Market Sounding — functioned as a meaningful motivation mechanism for early operator engagement.

Estimated duration: one to two months (may run in parallel with Phase 4).

Phase 6: Final Report Compilation

The final phase integrates all preceding work into a comprehensive final report.

A standard report structure includes the following sections:

1. Study Overview: Purpose, scope, methodology, and timeline
2. Site Analysis: Locational characteristics, usage data, and identified challenges
3. Park-PFI Viability Assessment: Market feasibility and business case evaluation
4. Market Sounding Results: Number of participants, key findings, and implications for solicitation conditions
5. Business Scheme: Cost-sharing structure, permit term, and designated management integration policy
6. Designated Park Facility Improvement Plan (Draft): Target facilities, rough cost estimates, and prioritization
7. Solicitation Schedule (Draft): Timeline from guideline publication through selection and opening
8. Remaining Challenges and Recommendations

The Koriyama City Kaiseizan Park feasibility study produced a report covering all seven of the above elements. This report served as the foundation for the subsequent three-stage sounding process and solicitation guideline development.

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The outputs of a feasibility study are not merely a "report" — they are a practical set of documents designed to drive a successful solicitation. The standard deliverable set is outlined below.

Deliverable 1: Final Report

The capstone document produced in Phase 6. It summarizes the park's current conditions, market viability, and fundamental scheme policy. It serves as the decision-making resource for internal budget requests and for explanations to municipal executives and councils.

Deliverable 2: Solicitation Guideline (Draft)

The legally mandated document drafted in Phase 4. It must cover all mandatory content items defined in Clauses 1 through 10 of Article 5-2, Paragraph 2 of the Urban Park Act. The quality of this draft directly determines the quantity and quality of solicitation bids.

A high-quality draft must fully incorporate insights from the site analysis and market sounding. Note that the Urban Park Act requires at least one month between the guideline's publication and the application deadline — this scheduling requirement must be built into the guideline itself.

Deliverable 3: Evaluation Scoring Table

The scoring matrix designed in Phase 5. It serves as the template evaluation sheet used by the selection committee, which must include at least two academic experts as required by law. Imbalanced scoring can create unintended advantages for certain types of applicants.

Scoring design must reflect the municipality's priorities. If local character is paramount, increase the weighting for Evaluation Item 2 (implementation structure, local business participation). If construction quality is the priority, increase the weighting for Evaluation Item 3 (facility installation plan).

Deliverable 4: Risk Allocation Matrix

A table enumerating foreseeable risks over the project term and specifying whether each risk is borne by the public sector, the private operator, or shared. It covers scenarios such as business failure, storm damage, and facility repair responsibility. This document forms the basis for subsequent formal agreement terms.

The MLIT guidelines provide a standard risk allocation framework. The consulting firm uses this as a base and customizes the matrix based on the specific characteristics of the target park and project.

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Scale-Based Estimates

Advisory fees for feasibility studies vary considerably based on project scale, complexity, and scope of deliverables. The following table provides a practical reference.

In the Kaiseizan Park project (approximately 12.89 ha, combined designated management model), Koriyama City issued an open proposal solicitation in 2020, ultimately selecting Oriental Consultants as the advisory firm. For large-scale combined models, advisory fees tend to approach the upper end of the range above.

Key Factors Affecting Cost

The following conditions drive fee levels up or down:

1. Number of sounding rounds: Each additional round adds approximately ¥1M–¥2M in consulting cost.
2. Guideline drafting included vs. separate: Including the guideline draft adds ¥2M–¥5M.
3. Combined designated management model: Adding designated management specifications adds ¥2M–¥4M.
4. Firm size: Large national consultancies carry higher costs but offer quality assurance and institutional credibility. Mid-size specialists often provide better cost-effectiveness.
5. Geographic location: Travel costs for site visits scale with project location.

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Part of the feasibility study cost may be offset by national government support.

The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) provides financial support for market soundings and feasibility studies through its "Urban Park Public-Private Partnership Feasibility Study Support" program, utilizing the Integrated Social Infrastructure Grants mechanism.

In addition, the Urban Development Fund (Vitalization Promotion Fund) allows local governments to lend funds to private operators with the national government providing half the amount as a subsidized loan.

For the latest details on these programs and application requirements, refer to the MLIT Urban Bureau's Park-PFI resource page.

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For feasibility study contracts, municipalities standardly use open proposal solicitation rather than price-only competitive bidding. The reasoning is straightforward: the nature of the work makes it impossible to evaluate on price alone — professional expertise, relevant experience, and the quality of the proposed methodology all have a direct bearing on the outcome.

Standard Proposal Evaluation Criteria

Vendor Selection Considerations

Verifying Park-PFI-specific experience: "PPP/PFI experience broadly" and "Park-PFI-specific experience" are not equivalent. Firms with hands-on experience drafting Park-PFI solicitation guidelines — particularly Clauses 9 (evaluation criteria) and 10 (solicitation implementation details) — are limited in number. Confirming this specific experience is essential.

Individual consultant accountability: Consulting work is delivered by people, not companies. Including contractual provisions that require pre-approval for changes to the assigned lead consultant reduces the risk of quality deterioration mid-project.

For smaller municipalities: Large national consultancies may assign less experienced staff to smaller engagements. Regional mid-size firms or Park-PFI-specialized boutique practices are worth considering as alternatives.

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After receiving the final report, the municipality should take the following actions.

Internal consensus-building: Present the study results to the mayor, council, and relevant departments (finance, legal, urban planning, etc.), and obtain an internal decision to proceed with solicitation. The final report serves directly as the briefing material for these discussions.

National grant application preparation: Applications for Integrated Social Infrastructure Grants for designated park facility improvements must be timed to the budget cycle. Finalize cost estimates using the facility improvement plan drafted in the study.

Finalizing the solicitation guideline: Starting from the consultant's draft, work through adjustments with the legal department, council, and community stakeholders to produce the final version. With the statutory minimum of one month required between guideline publication and application deadline, the schedule should be designed with ample buffer.

Selection committee formation: As legally required, the selection committee must include at least two academic experts. Securing qualified evaluators with expertise in PPP, parks, law, and finance should begin early.

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A feasibility study is not a box to check — it is an investment in solicitation success. A low-quality study produces a low-quality guideline, which produces low-quality bids. Breaking this chain starts at the procurement specification stage: clearly define deliverable quality standards before issuing the proposal solicitation.

For help organizing the preconditions for Park-PFI commercialization and designing a feasibility study procurement specification, please contact ISVD.

References

Park-PFI Utilization Guidelines for Improving the Quality of Urban Parks (Revised May 30, 2025) (2025)

Park-PFI Implementation Status (as of March 31, 2025) (2025)

Koriyama City, Kaiseizan Park Park-PFI Project: Feasibility Study Overview (2020)

Koriyama City, Kaiseizan Park Park-PFI Project: Solicitation Guideline (2022)

PPP/PFI Promotion Action Plan (Fiscal Year 2025 Revision) (2025)