The Fair Trade Commission will order Japan Highway Public Corp. to come up with measures to prevent bid-rigging, sources said Wednesday.

The order will be issued to the scandal-ridden highway operator under a law enacted in January 2003 to prevent bid-rigging by public entities.

Japan Highway will be ordered to prepare the plan before Oct. 1, when it will be privatized, the sources said.

It will be the third time such an order has been issued, following one to the Iwamizawa Municipal Government in Hokkaido in January 2003 and to the Niigata Municipal Government in July 2004.

Japan Highway is expected to consider seeking damages from former executives, including former Vice President Michio Uchida, 61, who was indicted by the Tokyo High Public Prosecutor’s Office in August, over the bid-rigging.

The highway operator allocated individual contracts on steel bridge-building work until 1993, when the contractors began dividing the work up among themselves, the sources said.

The antitrust watchdog has found that former Japan Highway executives helped the contractors write the documents allocating the work and endorsed them, the sources said.

The FTC has determined such actions qualify as active enticement to rig bids, illegal under the 2003 law, which was enacted to cover bid-rigging by public organizations, they said.

The FTC also believes several Japan Highway officials leaked information on orders to the companies before they were made public, they added.

The commission is expected to punish about 45 bridge-construction firms and related contractors for violating the Antimonopoly Law in a number of bridge projects for the central government and Japan Highway between 2002 and 2004.

Initially, several FTC officials questioned whether the bid-rigging law could be applied in this case, saying Japan Highway played a passive role by giving only “tacit consent” to the bid-rigging, according to the sources.

However, as the investigation progressed it became clear Japan Highway was involved in an extensive old boys network set up among the construction firms and that by helping to rig the bids, highway officials were trying to ensure they had job offers at those construction firms once they retired from the public sector, the sources said.

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