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Obayashi admits antitrust violation over maglev bid

Japan FTC investigating four big construction firms for anti-competitive collusion

Kyodo

Major construction company Obayashi Corp. has admitted to an antitrust violation over bidding for work on the Tokyo-Osaka maglev train project, sources said Tuesday.

Obayashi has admitted to the Fair Trade Commission that it was involved in bid obstruction with three other major contractors — Taisei Corp., Kajima Corp. and Shimizu Corp. — exempting it from a fine under the commission’s leniency rules.

The special investigation squad of the Tokyo District Public Prosecutor’s Office and the FTC on Tuesday searched the headquarters of Obayashi as well as Taisei’s offices. Investigators have been looking into how Japan’s four biggest contractors won 15 out of the 22 construction tenders issued by Central Japan Railway Co., also known as JR Tokai, for the ¥9 trillion ($80 billion) maglev train project that will link Tokyo and Osaka in about an hour.

The revelation comes a day after prosecutors searched the headquarters of Kajima and Shimizu in Tokyo on suspicion of conspiring with Obayashi and Taisei to determine which contractor will win orders.

Earlier this month, the prosecutors also raided Obayashi’s headquarters and questioned executives of the four construction companies on a voluntary basis.

Executives of the four firms have also been questioned on a voluntary basis.

Following the initial raid, Obayashi reported to the FTC that it had conspired with the three companies for maglev construction tenders, the sources said.

All the four contractors declined to comment Tuesday on Obayashi’s report while investigations on the matter are underway.

Under the FTC’s leniency rules, companies voluntarily reporting antitrust violations escape a fine. The company that does so first will also avoid criminal charges.

When the project is completed, JR Tokai will operate the world’s first train that uses superconducting magnetic levitation technology. It will travel at a top speed of 500 kph, much faster than current shinkansen trains.

JR Tokai aims to start maglev services between Tokyo and Nagoya in 2027 and extend the line to Osaka by 2037. The government has provided a total of ¥3 trillion to JR Tokai for the project.