Building Industry Japan

In a precedent-setting agreement, Fluor Corp. said Wednesday that it will join forces with a Japanese company to enter bids on major construction projects in both the United States and Japan. The "cooperation agreement," believed by industry experts to be the first of its kind, will allow the Irvine-based company's Fluor Daniel construction unit to participate in projects with Ohbayashi Corp., one of Japan's "Big Six" construction firms.

Foreign companies have been nearly shut out of Japan's construction market, despite an agreement that was to open up government contracts to outside bidders, a U.S. official said Thursday. Of the 410 government construction projects awarded in Japan last year, only four contracts were awarded to foreign companies, according to the U.S. official, speaking on condition of anonymity.

In an attempt to defuse an increasingly volatile trade issue, U.S. and Japanese officials Tuesday announced a plan that would allow American builders to bid for billions of dollars of construction work in Japan, including airports, roads, bridges and buildings. The accord came after two years of on-and-off negotiations, prompted by growing White House protests that Japan was unfairly blocking U.S.

In late January, Hiroshi Murakami, deputy chairman of the Hyogo prefecture real estate dealers association, spoke with energetic determination about tackling Kobe's housing crisis in the wake of the city's devastating earthquake. But now, 10 pounds thinner, Murakami is visibly exhausted. "Everybody is thinking just of themselves, demanding that their rubble be removed first, or that their home be repaired first," said the dispirited realtor, who also runs a small construction company .

In an extraordinary action, the U.S. Justice Department is negotiating to collect $35 million in damages from a cartel of Japanese construction companies that rigged bids on U.S. Navy contracts in Japan, U.S. officials confirmed Wednesday. David Schlitz, a department lawyer sent from Washington, has demanded that members of the consortium of 140 companies pay a cash settlement or face legal action in U.S. and Japanese courts, the officials said.

After more than 30 years of slugging away on the fringes of Japan's construction market, PAE International still had trouble hiring local subcontractors, so strong was the taboo against collaborating with foreigners. When a PAE executive complained about the dilemma in an interview televised here last year, however, he was quickly surprised by telephone calls from several sympathetic Japanese subcontractors. It seemed that a major shift in attitude was afoot. They were actually asking for work.

Construction Payoffs Probe Winds Up: Japanese prosecutors indicted a former Cabinet minister on charges of taking bribes from a big construction firm, in effect wrapping up a yearlong probe into payoffs from the construction industry. Former Construction Minister Kishiro Nakamura is suspected of accepting a bribe of nearly $100,000 from Kajima Corp. in exchange for pressuring anti-monopoly officials not to pursue bid-rigging charges involving Kajima and others in public works contracts.

Automotive suppliers may sell more parts and heavy-construction firms may get a better crack at major projects, but in general the new package of market-opening measures unveiled in Tokyo early today will have negligible impact on California firms and other U.S. companies seeking inroads into Japan, industry representatives and analysts said.

In Hong Kong, when you think of tunnels, you think of Japan's Kumagai Gumi company. Although the colony's British rulers gave the contract for the first tunnel under Hong Kong harbor--a subway--to a British firm, Kumagai established a foothold for itself when it led construction of the second tunnel--for automobiles.

Japanese Audit Faults Bidding System: Results of a Japanese government audit found fault with its bidding system in public works, lending credence to U.S. arguments that Japan's construction market is closed to foreign competition. The report by the government's Management and Coordination Agency said 20 out of 35 government ministries and public corporations had not adopted a fair open-bidding system.

Providing fresh evidence of how some Japanese markets are kept closed, Japan's Fair Trade Commission on Monday accused nine electrical machinery makers of illegal bid rigging. Among the firms accused of anti-competitive practices are some of Japan's most famous electronics firms, including Hitachi Ltd., Toshiba Corp. and Mitsubishi Electric Corp.

The builder proudly patted the all-American home--designed by California architects, constructed with Seattle carpenters and made from 2-by-4 wooden planks from Washington state. "We've built 300 imported homes . . . in Kobe and not one was damaged in the earthquake, while many traditional Japanese homes collapsed," said H. Kohda, director of Sumitomo Fudosan Home Co.

Hiroshi Murakami's post-earthquake struggle began when he rescued his wife from the rubble of their home here. Now he is struggling to stave off a bidding war for housing that threatens to impede a frantic search by as many as 150,000 families to find a place to live.

Every sizable earthquake teaches lessons, some of them easier for society to accept and act upon than others. When it is adjustments to procedures for an automatic shut-off of natural gas under heavy shaking, changes may be relatively easy. When it becomes apparent that bridge columns or railroad overpasses or embankments ought to be constructed differently, and massive retrofits undertaken, it may be more difficult, but eventually it will be done.

In Hong Kong, when you think of tunnels, you think of Japan's Kumagai Gumi company. Although the colony's British rulers gave the contract for the first tunnel under Hong Kong harbor--a subway--to a British firm, Kumagai established a foothold for itself when it led construction of the second tunnel--for automobiles.

Mitsuo Kon and his wife have talked of buying a new home for the past few years. This month, they decided the time had come to make a move. They found a "bargain"--a 1,000-square-foot, $567,000 condominium under construction 45 minutes by train from downtown Tokyo. "Prices are cheaper than two or three years ago. It looks like it's affordable for us," Kon, 56, said after filing an application to buy the unit.

U.S. Sues Japanese Construction Firms: It accused the group of companies of jacking up prices on construction projects at a U.S. naval base through bid rigging. The lawsuit, filed in Tokyo District Court, seeks $5.4 million in damages. The court said the suit targets 53 construction companies that bid on a total of 77 projects at the Atsugi Naval Air Facility near Tokyo between 1983 and 1990.

Construction Payoffs Probe Winds Up: Japanese prosecutors indicted a former Cabinet minister on charges of taking bribes from a big construction firm, in effect wrapping up a yearlong probe into payoffs from the construction industry. Former Construction Minister Kishiro Nakamura is suspected of accepting a bribe of nearly $100,000 from Kajima Corp. in exchange for pressuring anti-monopoly officials not to pursue bid-rigging charges involving Kajima and others in public works contracts.