Officials in bid scandal

08 May 2008

Japan: Two public officials have been charged in connection with Japan's bridge construction bid—rigging scandal. Three executives of Japan Highway Public Corp (JH), the Government body responsible for the construction and management of the country's roads, were arrested in July and August.

Tsuneo Kaneko, a member of JH's board, Michio Uchida, a JH vice president, and former board member Shozo Kanda were all arrested in mid—July in connection with on—going investigations into illegal anti—competitive behaviour in the steel bridge construction sector. Mr Kaneko and Mr Uchida have since been charged.

The three are suspected of helping contractors and suppliers illegally divide work by breaking contracts down into smaller parcels, so that more companies would benefit. It has been reported that prosecutors believe Mr Kanda, who went to work for one of the accused contractors on leaving JH, co—ordinated the scheme, with Mr Kaneko and Mr Uchida ensuring the contract break—up was approved by JH.

Investigations centre around work that was tendered last May on the No.2 Tomei Expressway. Dividing up the work is thought to have inflated construction costs by an estimated JPY 50 million (US$ 0.46 million).

As IC reported last month, Japanese prosecutors have already charged 26 construction companies and eight individuals for alleged collusion. The charges relate to 180 steel bridge construction contracts, worth JPY 71 billion (US$ 650 million) in the 2003 and 2004 fiscal years.

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