The Two-Stage Selection Structure
The roles of Stage 1 screening (qualitative eligibility) and Stage 2 evaluation (quantitative scoring), and their legal basis
Total evaluation score in Koriyama City's Kaiseizan Park solicitation — the benchmark for large-scale Park-PFI
500 pts
Selection structure: Stage 1 screening (pass/fail eligibility) → Stage 2 quantitative scoring by committee
2 stages
MLIT-proposed evaluation items: policy, structure, installation plan, operations, business plan, and price
6 items
Cap on price proposal weighting recommended by this article
Within 20%
To avoid price competition. Not a threshold published by any ministry or industry body
Under Article 5-4 of the Urban Park Act, the selection of applicants in Park-PFI is conducted in two stages. Understanding this two-stage structure is the prerequisite for designing evaluation criteria.
Stage 1: Screening (Eligibility Review and Qualitative Assessment)
Stage 1 is the screening process under Article 5-4, Paragraph 1. Applicants are assessed on the following dimensions to determine who advances to Stage 2:
- Alignment with the guidelines: Does the applicant's plan satisfy the conditions set out in the solicitation guidelines?
- Feasibility: Is the plan realistically executable? (Confirmed through supporting documentation)
- Technical capacity: Does the applicant have the track record and organizational structure needed for construction and management?
- Financial soundness: Is the applicant free from net liabilities as of the most recent financial statements? (Confirmed through objective documentation)
Stage 1 is a qualitative assessment, and decisions are essentially binary — pass or fail. Only those who pass advance to the quantitative scoring in Stage 2.
Stage 2: Evaluation (Quantitative Scoring)
Stage 2 is the evaluation process under Article 5-4, Paragraph 2. A selection committee comprising at least two academic experts conducts quantitative scoring of each application.
The requirement for at least two academic experts is a statutory obligation (Article 5-5 of the Urban Park Act). Municipal staff alone cannot conduct the review. In Koriyama City's case, the committee included a visiting professor of PPP studies at Toyo University, a Japan Heritage producer from the Agency for Cultural Affairs, the executive director of a park management foundation, and a certified public accountant.
The Six MLIT Evaluation Items
What each of the six guideline-proposed items actually evaluates
The MLIT guidelines propose the following six evaluation items for quantitative scoring in Stage 2.Evaluation Item ①: Business Implementation Policy
Evaluates the applicant's approach to promoting park utilization, improving park quality, stimulating the local economy, and building community partnerships. This item essentially asks: "What is this operator genuinely trying to achieve for the park and the community?"
A proposal framing plans as "renovating underutilized park space into a children's activity area and making it the anchor for community events" will generally score higher than one simply promising "to build a café and turn a profit."
Evaluation Item ②: Business Implementation Structure
Evaluates the roles and responsibilities of consortium members, staffing, track records of each participating company, financial soundness, and — notably — the extent of local firm participation.
The MLIT guidelines' explicit inclusion of "local firm participation" reflects the design principle that Park-PFI is not merely a revenue-generating enterprise but a mechanism for stimulating local economic activity. Scoring structures that favor consortiums combining national firms with local businesses over single national-firm applicants are common.
Evaluation Item ③: Facility Installation Plan
Evaluates convenience enhancement facilities, landscaping, architectural design, accessibility, and the construction plan. This is the item where visual design proposals — renderings, 3D images — can have the greatest impact.
Evaluation Item ④: Facility Management and Operations Plan
Evaluates the day-to-day management plan, safety and disaster response, and community engagement. This item assesses not just the opening day plan but the long-term continuity of management over the project period.
Evaluation Item ⑤: Business Plan
Evaluates the financing plan, revenue and cost projections, prospects for sustainable operations, and — importantly — withdrawal risk mitigation.
The explicit inclusion of "withdrawal risk mitigation" is significant. By requiring applicants to plan in advance for business difficulties (securing a successor operator, security deposits, insurance, etc.), the scoring system is designed to reduce municipal risk exposure.
Evaluation Item ⑥: Price Proposal
Evaluates the municipality's cost share for designated park facility construction (lower is better) and the proposed usage fee for revenue facilities (higher is better). This is the sole purely quantitative competitive dimension.
Dissecting the Koriyama City 500-Point Scoring Table
Breaking down the real scoring table item by item to read the design intent
Koriyama City's scoring table for Kaiseizan Park — totaling 500 points plus 8 incentive points — is included in full in the solicitation guidelines.Full Scoring Table
| Major Category | Subcategory | Points | Subtotal |
|---|---|---|---|
| 1. Overall Project Plan | Overall business implementation policy | 50 | |
| Improvement of citizen services | 20 | ||
| Park and area management | 20 | ||
| Stability and risk management | 30 | 120 | |
| 2. Redevelopment to Address Challenges (Designated Park Facilities) | Overall designated park facility plan | 20 | |
| Facility-by-facility construction plan (8 categories × 10 pts) | 80 | 100 | |
| 3. Revenue Facilities and Convenience Enhancement Facilities | Vitality creation | 30 | |
| Impact, community linkages, and uniqueness | 30 | ||
| Risks and response measures | 20 | 80 | |
| 4. Management and Operations (Designated Management Functions) | Ensuring equal citizen access | 10 | |
| Maximizing park utility | 20 | ||
| Stable human and physical capacity | 20 | ||
| Appropriate maintenance | 40 | ||
| Consideration for employment | 10 | 100 | |
| 5. Cost Reduction | Quantitative reduction effect | 20 | |
| Cost reasonableness | 10 | ||
| Revenue sharing | 40 | 70 | |
| 6. Value-Added Proposal | Value-added proposal | 30 | 30 |
| Total | 500 | ||
| Incentives | Trial sounding participation | +5 | |
| Market sounding participation | +3 | +8 |
Reading the Design Intent
Management and operations at 100 points (20%): Because Park-PFI was integrated with designated management, the largest single allocation goes to assessing management capability. "Appropriate maintenance" alone accounts for 40 points.
Designated park facility construction at 100 points (20%): The structure of 80 points for facility-by-facility plans (8 categories × 10 points) ensures specificity. Rather than accepting vague commitments ("we will comprehensively improve the facilities"), the design forces applicants to articulate concrete plans for each facility type.
Revenue sharing at 40 points (within Major Category 5): Combining designated management fee reduction and revenue returned to the park management authority within 70-point Category 5 enables fair, objective comparison of financial viability.
Neutralizing price competition with "value-added proposal": Price-competitive elements are distributed across Category 5 (70 points), while Category 6 (30 points) draws out creativity and innovation. The resulting balance makes price dumping relatively unlikely.
Designing to Avoid Price Competition
Why over-weighting the price proposal is dangerous, and alternative competitive dimensions
Unit costs and amounts in financial examples without a cited source are illustrative assumptions, not statistically established market rates. Use estimates and comparable records appropriate to the target facility, location and business when preparing a project plan. Distinguish these assumptions from cited statistics and case expenditure.
The most damaging error in evaluation criteria design is over-weighting the price proposal, which induces price competition.
The Price-Dumping Risk
Assigning excessive points to the proposed usage fee or the municipality's cost share for designated park facilities creates an incentive for operators to submit financially unviable price proposals in order to score highly. The consequences:
- Operations deteriorate financially after launch, degrading service quality
- In the worst case, the operator becomes insolvent and park facilities are left neglected
- The municipality incurs the cost and effort of finding a successor operator
Alternative Competitive Dimensions
To elicit competition among applicants without driving price competition, the scoring structure should create "what will you deliver?" as the competitive axis.
Examples of effective alternative competitive dimensions:
- Richness of designated park facility improvements (area, specifications, design quality)
- Local firm participation rate (what percentage of labor costs and procurement stays in the community)
- Specificity of partnerships with surrounding areas
- Distinctiveness of revenue facility business types and their contribution to increased park visitation
Recommended Weight for Price Proposals
We recommend keeping the total weight assigned to price-competitive elements (usage fees and municipality cost share for designated park facilities) within 15–20% of total points. This is our own guidance, not a standard set by the national government or an industry body. In Koriyama City's case, Category 5 "Cost Reduction" (70 points), which represents the price-competitive dimension, accounts for 14% of the 500-point total (excluding incentives).
Designing Sounding Bonus Points
How to structure incentive points and the Kaiseizan Park example (+5 and +3)
The Purpose of Bonus Points
Awarding bonus points in the formal solicitation to applicants who participated in market sounding is an important policy mechanism for encouraging early private-sector engagement with Park-PFI.
Sounding participation:
- Provides municipalities with the inputs they need to refine solicitation conditions
- Gives private-sector businesses a realistic assessment of the business opportunity
- Initiates relationship-building between the municipality and potential operators before the formal solicitation
Through these effects, the bonus point system increases competitive interest in the solicitation and improves the likelihood of project viability.
The Koriyama City Example (Total: +8 Points)
Koriyama City awarded +5 points for trial sounding participation and +3 points for market sounding participation.| Sounding Type | Content | Bonus |
|---|---|---|
| Trial Sounding | October 2020: one-month trial business operation | +5 pts |
| Market Sounding | January 2022: feedback on draft solicitation conditions | +3 pts |
A key aspect of this design is that bonus points were awarded for two of the three sounding stages (trial → preliminary → market). The resulting structure meant that businesses which engaged earliest had the greatest competitive advantage — linking relationship-building from 2020 directly to competitive positioning in the formal solicitation.
Design Principles for Bonus Point Values
When setting bonus point values, consider the following:
- Target 1–3% of total points: If the bonus is too large, the outcome of the formal solicitation may effectively be determined by whether an applicant participated in sounding, rendering the substantive evaluation pro forma
- Ensure fair access: Use open, publicly announced sounding formats accessible to all, so that bonus points are not effectively restricted to a predetermined set of businesses
- Mandatory advance disclosure in guidelines: The existence of bonus points, the point value, and which sounding activities qualify must be stated in the solicitation guidelines. Retroactively awarding bonus points not announced in advance creates legal risk
The Role of Minimum Qualifying Scores
The meaning of the 60% rule and its function as a safeguard against low-quality proposals
What Is a Minimum Qualifying Score?
A minimum qualifying score (or scoring threshold) is a safeguard establishing that proposals falling below a certain score will not be selected, regardless of how favorable their price proposal may be. It prevents the selection of proposals that fail to meet a basic standard of substantive quality.
Koriyama City's Minimum Qualifying Score
Koriyama City set two conditions as its minimum qualifying threshold:
- Total score across all evaluators must be at least 60% of total possible points (at least 300 out of 500)
- Each of the three primary categories — Overall Project Plan, Designated Park Facility Redevelopment, and Management and Operations — must each score at least 60%
This "60% overall and 60% across the three primary categories" design filters out skewed proposals that score well overall but are catastrophically weak in a specific area.
Preparing for the Risk of Zero Qualified Applicants
Setting the minimum qualifying score too high risks a scenario in which no applicant clears the threshold. Practical measures include:
- A threshold of 60–65% is realistic: Thresholds above 70% are often too demanding
- Use sounding to assess the proposal capacity of potential applicants in advance: Where the general level appears low, consider relaxing conditions
- Align evaluators before scoring: Conduct a pre-evaluation briefing to calibrate the scoring judgment of committee members
What to do next
When considering Park-PFI, examine the park's conditions, use and operator interest.
| # | What to check or consider | Responsible team or contact |
|---|---|---|
| 1 | Check the park's site area and the footprint of existing buildings, including rest and sports facilities, to establish current building coverage | Parks team |
| 2 | Check the building coverage limits and exceptions in the local ordinance. Compare them with existing building footprints to assess whether new facilities can be added | Parks team |
| 3 | Study visitor numbers and patterns of use, including weekday, weekend and seasonal differences, to assess likely demand | Site surveys and existing survey records |
| 4 | Check actual fees at comparable parks, taking account of differences in area, location and facility use | Other municipalities and published records |
| 5 | Present the survey results and proposed use to private operators. Ask about their interest and the conditions needed for a viable project | Market sounding |
Assess the scope for new buildings against existing building footprints and the local ordinance. If there is no room to add buildings, consider reuse of existing facilities and other project methods.
References
Guidelines for Improving the Quality of Urban Parks through Park-PFI (Revised May 30, 2025) — Urban Bureau, Ministry of Land, Infrastructure, Transport and Tourism (2025)
Koriyama City Park-PFI Project Overview (58564.pdf) — Koriyama City (2022)
Kaiseizan Park Park-PFI Solicitation Guidelines (April 2022) — Koriyama City (2022)
How to Write Park-PFI Solicitation Guidelines
The legal framework for Item 9 (evaluation criteria) — and how Koriyama City's 61-page guidelines embed the scoring table into the solicitation document
Park-PFI Market Sounding Practical Guide
How sounding participation bonus points are structured and how to design sounding rounds that maximize competitive interest in the formal solicitation
