Hokkaido Shinkansen bid-rigging probe: Japan’s Fair Trade Commission conducted searches on May 19. This is reported by the railway transport news portal Railway Supply.

Freight Shinkansen: Japan’s 275 kmph cargo train
Freight Shinkansen: Japan’s 275 kmph cargo train

The targets were nine railway construction firms and a government agency. The investigation concerns the Hokkaido Shinkansen Line extension. The project is valued in the trillions of yen.

Sources cited by The Asahi Shimbun said investigators will also examine “amakudari” (descent from heaven). They will check whether it may have been linked to the alleged collusion. Also, some companies under scrutiny have employed former JRTT officials. JRTT is the Japan Railway Construction, Transport and Technology Agency.

Also, the case centers on track-laying contracts for the approximately 212-kilometer extension. The route runs between Shin-Hakodate-Hokuto and Sapporo.

Hokkaido Shinkansen bid-rigging probe focuses on track work

JRTT divided the work into 10 sections. Bidding has already been completed for five of them. Representatives of the nine firms are suspected of coordinating the bidding. A company chosen in advance would win the contract.

The winning bids were between 94 and 99 percent of the estimated project costs. That range has raised suspicions that pricing information may have been leaked from the agency.

Meanwhile, the FTC is expected to examine the five remaining sections. It will assess whether they were affected by similar coordination.

JRTT and the taxpayer-funded project

The extension of the Hokkaido Shinkansen Line to Sapporo is planned for completion in fiscal 2038. Total costs are expected to reach as much as 3.5 trillion yen ($22 billion). It is one of Japan’s major national rail schemes.

In addition, JRTT is an independent administrative agency financed by the central government. It is in charge of Shinkansen construction. For Shinkansen lines under development, central and local governments cover around 70 percent of costs.

The FTC suspects that the alleged arrangement pushed up prices. The project is largely funded by taxpayers.

The companies named in the case are Sanki Kensetsu Inc. of Fukuoka; Daitetsu Kogyo Co. of Osaka; Hokkaido Kidou Shisetsu Kougyo of Sapporo; Kosei Kensetsu Co. of Hiroshima; Meiko Construction Co. of Nagoya; Senken Kogyo Co. of Sendai; Kyutetsu Corporation Co. of Kita-Kyushu; and two Tokyo-based companies, Union Construction Co. and Totetsu Kogyo Co.

A JRTT spokesperson told The Asahi Shimbun, “We will fully cooperate with the FTC’s investigation.”

Separately, JRTT has previously come under investigation over bid-rigging allegations.

In 2013, the FTC searched the agency and contractors. That similar case involved the Hokuriku Shinkansen Line. The investigation led to fines for the companies. Also, a former JRTT manager was convicted. The manager had leaked pricing information.

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