Obayashi, Shimizu Admit Bid-Rigging on Maglev Project

July 11, 2018

Tokyo- Japanese general contractors Obayashi Corp. and Shimizu Corp. admitted Tuesday their involvement in rigging bids for a high-speed magnetic levitation railway project.

On the first day of the firms' trial at Tokyo District Court, senior officials of the companies respectively pleaded guilty over the case, in which they are suspected of involvement in unfair restriction of trade in violation of the antimonopoly law.

Presiding Judge Takumi Suzuki separated the trial, deciding to conclude the trial of Shimizu on Aug. 24 and that of Obayashi on Sept. 13.

Taisei Corp. and Kajima Corp. were also indicted in the case, along with former Taisei executive Takashi Okawa, 67, and senior Kajima official Ichiro Osawa, 61. The two general contractors and the two individuals are currently in the pretrial procedures for sorting out points at issue.

During the opening session of the trial of Obayashi and Shimizu, prosecutors pointed out that Okawa and Osawa initiated their order adjustment attempts in 2013 at the latest. Okawa proposed bid-rigging to the then vice president of Obayashi first and then asked a Shimizu executive to take part. Later, they started exchanging a list of maglev line sections for which their companies wished to receive construction orders.

According to the indictment, Okawa, Osawa and other officials of the four companies held meetings, roughly between April 2014 and August 2015, to predetermine winners of contracts for three sections of the planned Shinagawa and Nagoya stations, ordered by Central Japan Railway Co., or JR Tokai, for the 9-trillion-yen Chuo Shinkansen maglev project.

The officials are also suspected of exchanging information about price estimates before they were submitted to JR Tokai.

The Tokyo District Public Prosecutors Office's special investigation squad has concluded that the former Shimizu executive and two other officials including the former Obayashi vice president also took part in prearranging winners of the contracts but refrained from indicting them.

JR Tokai aims to start operating the Shinagawa-Nagoya maglev line in 2027. Jiji Press