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Japan

Japan raids major building firms over alleged maglev bid-rigging

PUBLISHED : Monday, 18 December, 2017, 3:56pm
UPDATED : Monday, 18 December, 2017, 11:03pm

Tokyo prosecutors Monday raided two major construction firms over suspicions they colluded to secure contracts for Japan’s multibillion-dollar maglev project that will see trains running at 500km/h

The state-of-the-art maglev, or magnetically levitated, trains are expected to begin commercial service between Tokyo and Nagoya in central Japan in 2027, later extending to the western hub of Osaka.

The giant project, estimated to cost 9 trillion yen (US$80 billion), has seen various companies competing for contracts ranging from tunnelling work to building stations.

Construction firm Kajima’s headquarters and another Tokyo office were raided by investigators from the Tokyo District Prosecutors Office and the Fair Trade Commission for suspected antitrust law violations, said a company spokesman who declined to be named.

“We’d like to decline to comment on further details as the investigation is ongoing. We will continue to fully cooperate with the investigation,” he said.

Another general contractor Shimizu also said it was raided Monday.

The raids came after Japanese media reported that prosecutors would soon raid Japan’s big four contractors – Kajima, Shimizu, Taisei and Obayashi – over alleged collusion.

Officials from the four companies, called “super general contractors”, met regularly to rig bids, local media claims.

Of the last 22 bids related to the maglev project, 15 were won by joint ventures the four groups separately formed and distributed almost evenly among them, the reports said.

Taisei and Obayashi were not raided on Monday.

But prosecutors searched Obayashi earlier this month on suspicion of obstructing other companies’ business.

The company reportedly pressured other contractors to drop their planned bids for a contract to build an emergency exit at Nagoya.

Shares in Kajima, Shimizu and Taisei dropped more than two per cent on Monday while Obayashi closed slightly higher.

At 500km/h, maglev trains will run at roughly twice the speed of the current bullet trains in Japan.

A maglev train clocked a new world speed record in a 2015 test run near Mount Fuji, smashing through the 600km/h mark.