Builders settle damages suit over bid-rigging

Kyodo News

Two plant contractors reached a court-proposed agreement Friday to settle a damages suit over their bid-rigging on four garbage incinerator construction projects financed by the Tokyo Metropolitan Government and a garbage disposal union formed by the capital’s 23 ward offices in the 1990s.

Osaka-based Hitachi Zosen Corp. and Tokyo-based Mitsubishi Heavy Industries Ltd. agreed to pay Tokyo and the disposal union about ¥5.36 billion in damages plus delinquency charges and interest for an overall total of ¥7.53 billion.

According to the plaintiffs, this is likely to be a record amount for similar suits.

In the agreement, the two firms promised to “make efforts not to raise suspicions of bid-rigging practices in public works from now.”

The Tokyo High Court is expected to decide soon on a third contractor, Takuma Co., that refused to join the settlement.

Presiding Judge Hidetoshi Somiya had urged both sides to reach a compromise.

The plaintiffs are three lawyers in Tokyo who demanded that the three plant contractors pay about ¥30.7 billion in damages to the metro government and the disposal union.

In March 2007, the Tokyo District Court ordered the defendants to pay about ¥9.7 billion in damages, finding the three plant builders had rigged bids in all four incinerator projects from 1994 to 1998. The district court said the damages should be 5 percent of the contract value of about ¥195 billion.

Thirteen lawsuits were filed with 11 district courts against plant builders over their bid-rigging on incinerator construction projects financed by local governments and public entities in the 1990s.