Road-paving firms raided over suspected bid-rigging for Tohoku repairs

Kyodo, JIJI

Prosecutors and antitrust officials on Wednesday searched the head offices and local units of road-paving firms suspected of rigging bids for the repair of expressways damaged in the 2011 earthquake and tsunami.

The raids mark an escalation of an investigation into a criminal case, one that may involve a dozen companies.

The raids were carried out by the special investigative unit of the Tokyo District Public Prosecutors Office and the Japan Fair Trade Commission.

Authorities additionally suspect the repeated rigging of bids for expressway projects predating the disaster.

The state has provided about ¥16 billion in funds for such work in the hope of speeding up the recovery in the disaster zone.

Among the companies raided Wednesday were Nippon Road Co., Maeda Road Construction Co. and Taisei Rotec Corp., all of which are based in Tokyo.

More than 10 firms are suspected of involvement in bid rigging, but those that cooperated with investigators were likely excluded from the search.

Road-paving firms won contracts for 12 orders for roads including the Tohoku, Joban and Banetsu expressways in bidding conducted by a local unit of East Nippon Expressway Co., or Nexco East, from August to September 2011. Total costs were estimated at ¥17.6 billion.

The projects were for the repair of damaged sections of nine expressways in disaster-struck Iwate, Miyagi and Fukushima prefectures, as well as in Yamagata Prefecture further inland.

Sources familiar with the investigation said the main players in the bid-rigging were individuals handling sales and other matters at the local units of the industry’s three largest road-paving firms — Nippo Corp., Maeda Road Construction and Nippon Road. They are alleged to have colluded with other companies and decided in advance which would submit the winning bid.

The sources said the three companies’ Tohoku branches were likely those involved.

On average, the successful bids amounted to 94.77 percent of the contract prices budgeted by Nexco East, over 10 percentage points higher than the levels for similar contracts before the disaster, the sources said.

Meanwhile, road-paving companies are also under investigation for the alleged rigging of bids for expressway projects before 2011.

In January last year, the FTC raided 20 companies over the matter. It aims to file a criminal complaint by the end of March.

Some of the companies have admitted involvement. The prosecutors’ office has questioned some company employees on a voluntary basis.

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