Japan's Obayashi Corp., railway official probed in bid-rigging case

Source: Xinhua| 2017-12-12 17:18:30|Editor: Zhou Xin
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TOKYO, Dec. 12 (Xinhua) -- A Central Japan Railway Company (JR Central) official may have leaked information to construction firm Obayashi Corp. during the bidding process for a maglev train project in Japan, local media quoted relevant sources as saying Tuesday.

A special branch of the Tokyo District Public Prosecutors Office has been looking into the allegations and has questioned the official as well as Obayashi Corp. executives as part of an ongoing probe.

According to Japan's Kyodo News, investigators suspect the constructor gained an advantage over its competitors by obtaining inside information from the railway operator.

In April 2016, Obayashi jointly won a contract with Toda Corp. and JR Tokai Construction Co. to build an evacuation exit on the Tokyo-Nagoya-Osaka maglev train line. The contract was worth around 9 billion yen (79.29 million U.S. dollars).

Sources close to the matter said the JR Central official may have passed information to Obayashi, one of Japan's four largest construction firms, revealing the estimated cost of construction and information on other companies' bidding intentions.

Based on this privileged information, Obayashi is suspected of encouraging its competitors to submit higher bids, thus out-pricing themselves from the tendering process, according to the sources.

Four bidders were originally interested in bidding for the contract when it was offered in 2015. The contract work is just part of the 9 trillion yen (79.29 billion U.S. dollars) next-generation high-speed train project.

The train would be the world's first that operates by using superconducting magnetic levitation technology to propel passengers at speeds of up to 500 km per hour -- far quicker than Japan's current Shinkansen bullet trains.

Obayashi has also won three other contracts from JR Central for work with its joint venture partners, Kyodo News pointed out.

The maglev trains are expected to be operational in 2027 between Tokyo and Nagoya, with the route being extended by 2045 to Osaka.

The journey between Tokyo and Nagoya is expected to take only 40 minutes.