Photo/IllutrationA temporary bridge girder is moved into position at Tokyo's Shinagawa Station where a new facility will be constructed for the Linear Chuo Shinkansen Line. (Asahi Shimbun file photo)

Prosecutors made their first arrests on March 2 of former and current executives of two contractors in connection with suspected bid-rigging on the super-fast maglev train line project.

The Tokyo District Public Prosecutors Office announced the arrests of Takashi Okawa, 67, a former managing executive officer at Taisei Corp., and Ichiro Osawa, 60, a department head at Kajima Corp. in charge of the maglev project, on suspicion of violating the Anti-Monopoly Law.

A spokesperson for Central Japan Railway Co. (JR Tokai) said it was "extremely regrettable" that arrests had been made of officials at companies that won contracts for construction of the Linear Chuo Shinkansen Line.

Taisei and Kajima are two of the four "super general contractors" implicated in a collusion scheme for construction of sections of the line, which has an estimated cost of 9 trillion yen ($84.3 billion), of which about 3 trillion yen will come from the government's Fiscal Investment and Loan Program.

Both Okawa and Osawa denied the allegations during voluntary questioning. The former executives in charge of the project at Obayashi Corp. and Shimizu Corp. have acknowledged wrongdoing so while they have not been arrested, prosecutors will continue questioning them.

According to sources close to the investigation, between 2014 and 2015, Okawa and Osawa conspired with a former executive vice president of Obayashi and a former senior managing officer at Shimizu to collude on bidding for construction of a new maglev line station at Shinagawa Station in Tokyo.

By 2017, 24 contracts had been signed for the Linear Chuo Shinkansen Line, and the four major general contractors had won between three to four each.

In relation to construction work at Shinagawa Station, a joint venture centered on Shimizu won the contract for the northern construction area in September 2015 and the following month a joint venture headed by Obayashi won the contract for the southern portion.

According to sources, Okawa contacted the executives from the three other companies in coordinating the bid-rigging.

In about 2014, when JR Tokai decided how the construction project would be divided up, the four companies also agreed on how to divvy up the construction work. Okawa and the Obayashi executive vice president played key roles in convincing the two other executives to go along.

In response to questioning until now, Okawa pointed to the fact that Taisei failed to win the contract for construction of a new Nagoya Station that it wanted.

"We should have been awarded the contract if collusion had actually taken place," he reportedly told investigators.

Osawa also told investigators that he did not have the authority within Kajima to decide on which projects the company wanted to win.

Obayashi and Shimizu, meanwhile, have acknowledged committing wrongdoing and appealed to the Fair Trade Commission's system of leniency in the hope of reduced fines.