Contractor Obayashi raided over maglev Shinkansen Project

December 10, 2017

Tokyo- Public prosecutors have raided major Japanese general contractor Obayashi Corp. for alleged misconduct in tenders related a project to build a magnetic levitation Shinkansen train line, it was learned Saturday.

The Tokyo District Public Prosecutors Office's special investigation squad searched the company's headquarters and elsewhere for evidence to back up its allegations between Friday and the small hours of Saturday, informed sources said.

Obayashi is suspected of committing fraudulent obstruction of business. The company is believed to have engaged in misconduct in tenders in which it won contracts.

Construction work for the Chuo Shinkansen maglev line started in 2014. Central Japan Railway Co. , or JR Tokai, plans to open the ultrahigh-speed train service between Tokyo and the central Japan city of Nagoya in 2027.

The opening of the planned entire service between Tokyo and Osaka, western Japan, is expected to be moved up by up to eight years from the initially scheduled 2045. The service will link the two cities in some 60 minutes at the fastest.

The overall construction costs are estimated at some 9 trillion yen, part of which will be financed with loans from a government affiliate.

According to JR Tokai, Obayashi won a total of four contracts, including the construction of a new Shinagawa station in Tokyo for the maglev line, as a consortium member for the project.

Obayashi, founded in 1892, logged group sales of 1.87 trillion yen in the latest business year ended in March this year. In 2007, former Obayashi advisers were indicted over bid-rigging in tenders for construction projects ordered by the municipal governments of Nagoya and Hirakata, Osaka Prefecture.

An Obayashi official admitted that the company was searched by prosecutors, noting its readiness to fully cooperate.

JR Tokai said that it was not aware of the alleged misconduct until the news broke. Jiji Press