The Fair Trade Commission on Friday recognized bid-rigging by Central Japan Railway (JR Central) and five other firms regarding inspection work for bridges installed over railroad tracks in violation of the antimonopoly law, and ordered them to end the collusion and prevent a recurrence.
The five companies, all construction consultancies, were fined ?100 million ($636,630) in total.
It is the first time for the Japanese antimonopoly watchdog to issue an administrative order to any of the Japan Railways Group companies for breaching the law. The commission had never issued such an order to the now-defunct Japanese National Railways, which was privatized to create the JR Group in 1987, either.
The five consulting companies subject to the FTC orders include JR Central Consultants, which is a unit of JR Central, Dainichi Consultant, Tonichi Engineering Consultants and Japan Transportation Consultants.
According to the FTC, JR Central, whose main service area is the Tokai region, and the five consultancies started in February 2021 or earlier to prearrange winners when bidding for contracts placed by local governments in the region for the inspection of bridges over railroads managed by JR Central.
JR Central provided the five companies with lists of items related to inspection work before bidding. The railroad operator also heard from them about their requests regarding which contracts they would like to win and shared the information with them.
The FTC determined that JR Central was involved in the pre-selection of successful bidders although it did not take part in the bidding.
Bid-rigging was conducted for a total of 111 tenders, with the average contract value amounting to about ?12 million, the FTC said.
Structures including bridges must undergo inspections every five years in the wake of a deadly partial collapse of the ceilings of the Sasago Tunnel on the Chuo Expressway in Yamanashi Prefecture, in December 2012.
¡°Taking legal action against bid-rigging for inspection work on bridges over railroad tracks, for which taxpayer money is used, helps secure the interest of the public,¡± FTC official Naohiko Komuro told a news conference in Nagoya, emphasizing that the commission will continue to act strictly against bid-rigging on public infrastructure-related projects.
At a separate news conference in Nagoya, Masami Nitta, chief of JR Central¡¯s Conventional Lines Operations Division, apologized for the wrongdoing and said, ¡°We will work harder to thoroughly abide by laws and regulations, and make efforts to prevent any recurrence and regain trust.¡±
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.