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2 more firms searched over suspected bid-rigging for maglev train project

The Meijo emergency exit from the underground tunnel of the maglev train line is under construction in Naka Ward, Nagoya. (Mainichi)

The Tokyo District Public Prosecutors Office and the Japan Fair Trade Commission searched two more companies on Dec. 18 on suspicion of rigging bids for construction contracts for a magnetically levitated (maglev) high-speed train line, it has emerged.

Kajima Corp. and Shimizu Corp. are accused of violating the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade.

The prosecutors office's special investigation unit is also poised to raid again Obayashi Corp., which is one of four major general contractors under suspicion in the case, as well as Taisei Corp. for allegedly violating the antimonopoly law.

The investigation unit raided Obayashi's head office on Dec. 8 following suspicions that Obayashi illegally acquired information from Central Japan Railway Co. (JR Central) about its process for selecting a firm to work on the construction of the train line. It is alleged that Obayashi accepted an order on the back of this information, and was hence investigated under suspicion of fraudulent obstruction of business.

Following its search of Obayashi, the special unit has also been questioning employees belonging to other major general contractors. As a result, the unit apparently suspects that that these three other firms may have also conducted bid-rigging relating to the train line -- an act banned under Japan's antitrust laws -- and accepted illegal orders.

Specifically, it is suspected that Obayashi managed to find out the maximum price of construction for the Meijo emergency exit in Nagoya's Naka Ward, from a JR Central employee. Based on this information, it is thought that Obayashi then put together a bid of approximately 9 billion yen in April 2016, as part of a joint venture with Toda Corp. and JR Tokai Construction, which enabled the firm to win a construction contract.

Moreover, it is thought that Obayashi then urged the other general contractors to withdraw from the bidding process.

In response to the allegations, a senior manager at Obayashi. said, "We did swap information with other general contractors over construction on the maglev line, but the exchanged info was all (legally) above board. We did not do any bid-rigging." Meanwhile, Kajima, Shimizu and Taisei have all declined to comment on the grounds that the investigation is ongoing.

The maglev high-speed train line is a huge project that aims to connect Tokyo and Osaka in just 1 hour and 7 minutes. JR Central aims to open the 438-kilometer line between Tokyo and Osaka by 2045. The total construction costs are thought to be about 9 trillion yen.

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