Constructors in Scandal

Special Investigation Division of Tokyo District Prosecutor’s Office raided the office of a major construction company, Obayashi-gumi, with suspect of fraudulent obstruction of business. Obayashi-gumi is doubted as having involved in illegal contract for construction of new stations of maglev train line, which operation is expected to start in 2027. The prosecutors then extended its investigation to other major constructors. Newspapers are trying to grab the political meaning of the search.

Although it is a business of Central Japan Railway Company, the construction of maglev train system is a national project, which cost amounts to ¥9 trillion financed by national government. The train will commute Tokyo and Nagoya in 40 minutes. It will be extended to Osaka in 2037. Construction of some parts of the system has been started, making contract with major constructors in Japan.

Tokyo District Prosecutor’s Office found illegal activities in the auction to receive business of building an evacuation exit in Nagoya Station. In the construction, a joint venture of Obayashi, Toda Construction and JR Tokai Construction, won the business, which would set new exit from underground corridor to the surface. Those companies also won a business on Shinagawa Station, the starting point of maglev train in Tokyo.

A big question was whether the false contract could be limited to Obayashi. There are four major constructors called super general constructors in Japan. All of them are partly involved in the maglev train project. It is fair to say that maglev train project is a joint venture of those constructors, which occupy cutting-edge technology for the most progressive high-speed train system in the world.

Ten days later, the prosecutors made raids to Kajima and Shimizu on Monday. Taisei will also be included in the investigation with suspect of violation against Anti-trust Law. Those big four have declared in 2005 elimination of collusion in contract, which caused collapse of regional collusion groups all over Japan. Although collusion of those major constructors has been thought to have ceased, increase of construction businesses after East Japan Great Earthquake in 2011 might have caused revival of false contracts.

Investigation on the major national project will be a significant damage on Shinzo Abe administration. Liberal Democratic Party has been promoting construction business of infrastructure, which was traditional political tool for collecting votes in elections, especially after taking administration in 2012. Special Investigation Division of Tokyo District Prosecutor’s Office always deals with criminal cases with political purpose. Major constructors’ scandal can be a protest against politics handled by Prime Minister Abe.