Wednesday, January 20, 2016

Japanese firms raided on suspicion of rigging bids for post-disaster repair contracts

Japanese prosecutors on Wednesday raided the offices of road-paving companies on suspicion they were involved in bid-rigging for road reconstruction projects in regions devastated by the earthquake and tsunami in March 2011.

The Tokyo District Public Prosecutors Office and the Japan Fair Trade Commission, raided the offices of Maeda Road Construction, Nippon Road, Taisei Rotec and Toa Road, in search of evidence of bid-rigging activities for as many as 12 road-paving projects.

All of the companies searched Wednesday are headquartered in Tokyo, but sources close to the matter said that the companies' officials based in local branches in Japan's northeast, led the bid-rigging racket, which saw the average bidding price at just 94.7 percent of standard estimates and averaging more than 10 percent higher than such projects, before the disaster.

The allegations primarily involved projects to repair expressways, between August and September of 2011, but investigations into probing bid-rigging cases connected to the companies, even before the disaster-linked damages in March 2011, are also being carried out, the sources said.

The companies allegedly unfairly won contracts totaling 17.6 billion yen (150.55 million US dollars) for road repair projects. The projects comprised major thoroughfares in Japan such as the Tohoku, Joban and Banetsu expressways, which serve regions that were pummeled by the 2011 megaquake and tsunami that took the lives of around 16,000 people, injured more than 6,000 and left some 2,500 people missing across 20 prefectures in Japan in the aftermath.

The repairs were ordered by the East Nippon Expressway Company and were funded by allocations from state subsidies. According to local media reports, some of the companies under investigation have admitted their culpability in the manipulation of the process to secure the lucrative and much-needed reconstruction projects.

The government has paid out 16 billion yen (136.86 million US dollars) in funds for essential road repair work to speed up the reconstruction of regions devastated by the massive temblor and tsunami.

Japan's parliament on Wednesday enacted an extra budget for fiscal year 2015, which designates an allocation of 800 billion yen (6.84 billion US dollars) for efforts to accelerate the still-sluggish reconstruction efforts continuing almost five years after the disaster demolished swathes of areas along the east and northeastern seaboard here.

The latest bid-rigging scandal involving projects essential to the restoration and recovery of key infrastructure in Japan after the quake and tsunami disaster, follows on the heels of antitrust officials raiding the offices of 13 road-paving firms in January 2015.

 Xinhua -

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