Suspicions that major construction firm Obayashi Corp. was involved in improper bidding practices over a contract on work related to the construction of the ¥9 trillion maglev line linking Tokyo and Osaka are particularly troubling given that it is among the firms that once publicly declared they would never engage in bid-rigging after they had been repeatedly accused of such practices in public works projects. Investigators should get to the bottom of the budding scandal to see whether the construction firms have in fact put their shady practices behind them.
Obayashi, one of the nation's top four general contractors, is being investigated by prosecutors over an allegation that the firm obstructed the bidding process by Central Japan Railway Co. (popularly known as JR Tokai) on a ¥9 billion project to build an emergency exit for an underground maglev station in downtown Nagoya. It is suspected that Obayashi, which won the deal in a joint venture with two other firms in April last year, colluded with rival construction companies to make arrangements so that the latter would submit higher bids than Obayashi and let it win the contract. It is suspected that a JR Tokai employee leaked confidential information on the cost of the work to Obayashi, based on which the firm calculated the estimate that it presented to the railway operator.
Taxpayer money would be squandered if construction costs on projects ordered by national and local governments become inflated because of bid-rigging. If such a practice increases the cost of work ordered by private-sector firms, the added expenses may be passed on to customers.