‘Amakudari’ spells more contracts

Kyodo News

A study by the Board of Audit showed Wednesday that about 80 percent of the “public-interest entities” that have exclusive contracts with the government have former bureaucrats on their payrolls and get contracts worth nearly eight times more than those that do not.

The research underscored once again the prevailing notion that the practice of “amakudari,” or hiring retired government officials, improves the odds of getting government work, especially through the practice of single-tendering, which gives work exclusively to the contractor picked by the ordering party.

Single-tendering also tends to be more costly than an open bid because there is no competition.

“It has been a situation where substantive competition is not secured,” an audit board official said. “Government offices need to account for why they are opting for single tendering with public-interest entities that have their former employees on their payrolls.”

As of April 2007, 1,141 public-interest entities had been established in line with Civil Code provisions and granted tax breaks, the audit board said.

Of them, 78.6 percent had hired a total of 9,196 former government employees, with more than 30 percent of them in executive positions.

In fiscal 2006, entities without bureaucrats on their payrolls won an average of 2.3 projects worth ¥47 million. Those that had hired former bureaucrats won an average of nine projects worth ¥366 million.

As of April 2007, the Land, Infrastructure, Transport and Tourism Ministry had turned out the most bureaucrats, with 3,377.

They found work at 227 organizations.