Japan’s Obayashi probed for bid-rigging on $80bn maglev line

Japanese prosecutors have begun an investigation into whether the Obayashi Corporation rigged its bid for work on one of the stations that will serve the country’s $80bn maglev project.

Officials conducted a search of the company’s Tokyo headquarters on Friday and Saturday, and the company vice president in charge of civil engineering was brought in for questioning. An official at the company’s Nagoya office was also questioned by prosecutors, according to reports in the Japanese press yesterday.

The company issues a short statement today confirming the visit of the Tokyo District Public Prosecutors Office to its Tokyo headquarters on Friday. It confirmed that the visit was in connection with bid-rigging, but gave no other details.

The maglev train project is an $80bn scheme to link Tokyo, Nagoya and Osaka with a 500km/h line. Local media reported that the contract under investigation was one Obayashi won in April 2016 with the Toda Corporation and JR Tokai Construction to build an emergency exit for Nagoya station.

Obayashi has won four contracts from Central Japan Railway for work on the line. There were reports in the Japanese press that another of those contracts, won in conjunction with Maeda Corp and one of JR Central’s units, was also being looked into.

The Financial Times reports that shares in Obayashi were down 7.6% after the morning session on the Tokyo Stock Exchange; JR Central was down 1.3% and Maeda fell 2.6%.

The value of the contracts under suspicion is not known.

Obayashi has said it is "fully cooperating" with investigators. The company has a turnover of $11.5bn.

Image: A prototype maglev train undergoing testing in Japan (Creative Commons)

Further Reading:

Story for GCR? Get in touch via email: [email protected]

Latest articles in News