OSAKA – The Osaka Municipal Government has awarded exclusive contracts totaling about 1.5 billion yen to a semipublic corporation whose executive staff is dominated by former city employees, city officials said Thursday.
Guidelines of the Land, Infrastructure and Transport Ministry allow authorities to sign an exclusive contract with a company in cases that require patents, special knowhow or special facilities.
Osaka’s Economic Affairs Bureau placed contracts with the corporation, known as ATC, to renovate floors for city-affiliated facilities at the Asia and Pacific Trade Center. ATC, created to promote imports, operates the two-building complex.
The bureau said it placed a 320 million yen contract with ATC to renovate a space inside the complex in 1996.
The city has placed six other exclusive contracts with ATC, including one worth about 240 million yen for a housing exhibition in 1995 and another worth about 160 million yen for an environmental exhibition in 2000, the officials said.
Shigenobu Okuno, head of the city bureau’s general affairs department, said, “ATC has thorough knowledge of the complex and we believe officials in charge at the time of the contracts made the right decisions.”
But ATC Director Yutaka Kojima said: “ATC usually does not handle interior renovation for tenants. I think we signed the contracts at the request of the city government.”
ATC was established in 1989 by the city and private sector. The complex, in Osaka’s Suminoe Ward, serves as a wholesale center to promote imports.
The city has a 33.9 percent stake in ATC, which is capitalized at 22 billion yen.
ATC has been operating in the red since the complex opened in 1994 due to a lack of tenants. It had a negative net worth of 25.3 billion yen as of March 31, 2003, and received a debt waiver totaling about 70 billion yen from financial institutions last February.