Japanese maglev builders charged with bid rigging

Japanese maglev builders charged with bid rigging

COLLUSION:Tokyo district prosecutors said Japan’s four biggest construction firms coordinated bidding to ensure that each won a similar share of the train contracts

Prosecutors on Friday pressed charges against four of Japan’s biggest construction companies for allegedly colluding on bids for a showcase high-speed magnetic levitation, or maglev, train line connecting Tokyo and central Japan.

The Tokyo District Prosecutors’ Office indicted Taisei Corp, Kajima Corp, Obayashi Corp and Shimizu Corp, along with an executive each from Taisei and Kajima, for allegedly violating anti-trust laws, it said in a statement.

They said the builders coordinated bidding to ensure that each won a similar share of contracts for the line, called the Linear Chuo Shinkansen.

The US$80 billion maglev railway between Tokyo and Nagoya is a decades-long project expected to reduce travel time between the two cities to 40 minutes from the current 100 minutes. It is expected to open in 2027 and the line is due to be eventually extended to Osaka in western Japan.

Prime Minister Shinzo Abe’s government has been a strong advocate of the endeavor.

Work on the line is being carried out mostly by joint ventures led by the four builders, who are also major contractors for building venues for the 2020 Tokyo Olympics, including Tokyo’s new national stadium.

Japan’s Olympic organizers said they have decided to suspend Taisei and Kajima, whose executives have been arrested in the alleged bid-rigging, from bidding on new construction of Olympics facilities, effective on Thursday.

In an e-mail to The Associated Press, the organizers said the decision factored in the “social impact of the case,” citing the Tokyo city government’s suspension of the two companies from city projects for an unspecified period.

The organizing committee said it would consider allowing Taisei and Kajima to join bidding if their participation is desperately needed to meet deadlines.

Bid-rigging remains entrenched in Japan’s construction and other sectors, despite repeated efforts to crack down and pledges by contractors to eliminate the practice.

The project at the center of the maglev bid-rigging is for construction of new terminal stations.

Prosecutors said that officials from the four companies met at Tokyo restaurants to discuss ways to ensure that they could each win bids from train operator Central Japan Railway Co.

As a result, they allegedly obstructed competition and harmed the public interest, they said.

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