The four major contractors indicted on charges of engaging in unfair bidding for contracts dealing with the ¥9 trillion maglev project linking Tokyo and Osaka had declared in 2005 an end to the widespread industry practice of bid-rigging after they were accused of such wrongdoing in a series of government projects. The charges by prosecutors, if valid, would mean that the contractors have not learned from the past mistakes that they pledged never to repeat. Along with exposing the responsibility of the parties involved, the investigation into the case should shed light on why these nefarious deeds are allegedly being repeated and, if there are structural problems behind the practice, what needs to be done to stop it.
Indicted on Friday by Tokyo prosecutors, acting on a criminal complaint filed by the Fair Trade Commission over suspected violation of antitrust rules under the Anti-monopoly Law, are Obayashi Corp., Kajima Corp., Shimizu Corp. and Taisei Corp., along with Taisei and Kajima executives in charge of their firms' maglev business. The prosecutors claim that the four contractors colluded between 2014, when the government gave the go-ahead for the maglev construction, and 2015 to adjust their bids for works to build stations in Tokyo's Shinagawa district and Nagoya. Officials of the companies allegedly agreed to determine ahead of the bidding which of the firms should win the order for which section of the work and exchanged information about their estimated bid prices, thereby obstructing the competition to win the work orders.
Later, orders for two sections of the work to build the maglev station in Shinagawa went to joint ventures led by Obayashi and Shimizu, respectively, while the bidding for work on a section at the Nagoya station was won by an Obayashi-led consortium. Of the 15 work orders for construction of tunnels and underground stations offered by Central Japan Railway Co. (JR Tokai) by the end of last year, each of the four major contractors won three or four of the contracts.