Obayashi allegedly made individual bid-rigging arrangements

December 11, 2017

Tokyo- Public prosecutors are investigating Obayashi Corp. on suspicion that the major general contractor made bid-rigging arrangements on an individual basis with other bidders in tenders related to a plan to build a magnetic levitation Shinkansen train line, Jiji Press learned Monday.

The Tokyo District Public Prosecutors Office's special investigation squad suspects Obayashi of obstructing the business of the contractee, Central Japan Railway Co. , through such individual arrangements, rather than via collusion among all bidders, according to informed sources.

Making arrangements among participants in biddings for projects by private-sector companies with the aim of deciding the winning bidder in advance constitutes a violation of the antimonopoly law.

The investigation squad raided the head office of Obayashi and other related locations on Friday and questioned Obayashi officials, including the 66-year-old vice president who heads the civil engineering department, on a voluntary basis.

The vice president and other officials who were questioned have denied their involvement in the alleged fraudulent acts, saying they did not make any advance arrangement, the sources said.

The investigators have also questioned officials of another major general contractor Kajima Corp. , they said. Kajima admitted that its employees are being questioned on a voluntary basis.

The contractee railway operator, known as JR Tokai, signed deals respectively with general contractors for a total of 22 construction projects related to the scheme to open the ultrahigh-speed maglev train service between Tokyo and the central Japan city of Nagoya in 2027. The projects include those to build tunnels, train stations and emergency exits.

A consortium joined by Obayashi won four orders, for building two emergency exits, a new Shinagawa station in Tokyo and a new Nagoya station. Successful bidders in other projects include consortiums led by such major general contractors as Shimizu Corp., Kajima, Taisei Corp. .

The officials of Obayashi have told the investigators that various companies received orders only because they have strength in different fields and that no arrangement was made among the bidders, the sources said.

Obayashi President Toru Shiraishi was planning to attend a ceremony to commemorate the completion of a hydrogen-fueled power generation facility in the western Japan city of Kobe on Sunday but abruptly decided not to appear in the event. The ongoing investigation into Obayashi was apparently behind the decision. Jiji Press