Prosecutors have arrested the head of a construction equipment firm and purported supporter of Fukushima Gov. Eisaku Sato on suspicion he rigged the bidding on a prefectural contract to build a road and sewage system.

Also arrested Monday was an executive of local builder Sato Kogyo Corp.

The Tokyo District Public Prosecutor’s Office suspects that Masao Tsuji, 59, who heads Tsuji Maintenance Engineering, and Sato Kogyo executive Keiichi Yamaki, 47, were involved in arranging with local construction companies the winner of the tender from the Fukushima Prefectural Government, investigative sources said.

Prosecutors also questioned Sato Kogyo Chairman Katsumi Sato a second time Tuesday afternoon about the alleged bid-rigging, after speaking to him Sunday. The chairman has denied he was involved, sources said.

Prosecutors on Monday night raided several locations, including Sato Kogyo’s head office in Fukushima, Sato’s house and the home of a 70-year-old man who formerly headed the prefectural government’s civil engineering division, the sources said.

The case emerged as part of the prosecutors’ investigation into suspected tax evasion by Mizutani Kensetsu Co., an engineering firm that worked on the two projects as a subcontractor.

Tsuji is suspected of having been in charge of the bid-rigging and that Tokyo-based Tokyu Construction, which won the bid along with Sato Kogyo, paid him for getting it the contract, the sources said.

The public works projects involved are a road to the Tohoku Expressway and a sewage system in the upper Abukuma River region.

According to prosecutors’ investigation, 15 companies bid on the contract in August 2004. Sato Kogyo and Tokyu Construction together made the winning bid of 816.9 million yen. The prefectural government’s estimate for the projects was 863.39 million yen.

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