Construction exec grilled over alleged bid rigging for maglev-linked construction

Prosecutors investigating Obayashi Corp. suspect the major construction firm rigged a bid in connection with a maglev train-related construction, with one of the company's vice presidents brought in voluntarily for questioning about the matter, sources close to the case said Sunday.

Prosecutors searched the company's headquarters in Tokyo and other sites on Friday and Saturday to investigate possible bid rigging on contracts linked to a 9 trillion yen ($79 billion) maglev train project linking Tokyo, Nagoya and Osaka.

In addition to the vice president who presides over Obayashi's civil engineering unit, an official at the company's Nagoya office was also questioned by prosecutors, the sources added.

Obayashi is one of Japan's four biggest construction companies. The company's civil engineering unit is mainly in charge of construction linked with the maglev train project.

The next generation high-speed train, the world's first using superconducting magnetic levitation technology, will travel at a top speed of 500 kilometers per hour.

Obayashi won four contracts from Central Japan Railway Co. for work with its joint venture partners from October 2015. Of the four, the Tokyo prosecutors are investigating a contract Obayashi won jointly with Toda Corp. and JR Tokai Construction Co. in April 2016 to build an evacuation exit on the maglev train route. The work was due to be completed by September 2019, the sources said.

The value of the contract has not been disclosed. JR Tokai Construction is wholly owned by JR Central which operates Tokaido Shinkansen bullet trains connecting Tokyo and Shin-Osaka.

"We will fully cooperate" with investigators, an Obayashi spokesman said.

Obayashi is among the contractors working to build an ultra high-speed train line between Tokyo and Osaka by 2045 to be run by JR Central.

Services between Tokyo and Nagoya on a 286-km stretch are slated to begin in 2027, connecting the capital and the central Japan city in only 40 minutes, less than half the 88 minutes it now takes on the quickest shinkansen bullet train.

JR Central said it is not aware of any fraudulent behavior in the bidding process.

Obayashi posted sales of 1.3 trillion yen in the past business year to March 31. The company, established in 1936, is expanding its business globally and has about 8,500 employees.