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Companies refuse to pay up bid-rigging penalties

Date Posted: 2006-09-01

Construction companies across Okinawa are facing financial crisis, and have told the Prefecture they can’t pay penalties levied on past bid-rigging charges.

Okinawa Prefecture has directed the construction companies involved in bid rigging over the past few years to cough up ¥8,000,000,000 ($70,148,440). The companies involved refuse, saying “we are hoping the prefecture will make a discount on the penalties they want from us. We can never pay that much money.”

Several construction companies also point out that since the bid-rigging problem, bid costs have dropped sharply. They say that even during the coming five years, there won’t be money available to pay the penalties. Construction companies are facing increased competition from mainland companies, too.

Companies are now in the process of slashing their work forces, reducing more than 1,000 positions over the past few months. The Tokyo-Commercial Research Company says that at least 60 companies have filed for bankruptcy since June last year, and predicts more will be following suit within the year.

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