"Shipbuilders Give Up On Bidding For Haneda Airport Expansion"

Friday, August 20, 2004

Shipbuilders Give Up On Bidding For Haneda Airport Expansion
Japan - Nihon Keizai Shimbun


TOKYO (Nikkei)--Expansion of Tokyo International Airport at Haneda has
virtually been awarded to a consortium led by Kajima Corp. (1812) even
before bidding takes place because its presumed competitor, a group
involving Mitsubishi Heavy Industries Ltd. (7011) and other shipbuilders,
has decided to drop out of the contest, The Nihon Keizai Shimbun learned
Friday.

The shipbuilders' consortium was unable to meet conditions laid down by the
Ministry of Land, Infrastructure and Transport. Specifically, the Mitsubishi
Heavy-led joint venture failed to sign up partners from other industries
despite the ministry's demand that each bidder include at least two
companies that take charge in each of the four areas: airport construction,
harbor construction, paving and steel structures.

At an estimated cost of around 600 billion yen, the project is expected to
be the single largest public works contract ever to be awarded in Japan. The
new runway is slated to open in 2009. Bidders must apply by Aug. 26 to take
part in the bidding, which is scheduled for March 2005.

The shipbuilders' joint venture was to offer construction of a runway over
the sea using a megafloat, or very large floating structure, construction
technology.

Its withdrawal from the race means that the new runway for Japan's busiest
airport will be built by the remaining 15-company group using a combination
of land reclamation and pier construction. This group includes the top four
general contractors -- Kajima, Taisei Corp. (1801), Obayashi Corp. (1802)
and Shimizu Corp. (1803) -- as well as Maeda Corp. (1824) and Penta-Ocean
Construction Co. (1893), which has expertise in marine civil engineering.

The ministry usually specifies the construction method to be used in a
project before holding a bid. But it has refrained from doing so for the
first time with the Haneda project, hoping to generate more competition and
drive down the cost.

"We will examine an application strictly even if only one group takes part
in the bidding," a ministry official says. However, some fear it is
inevitable that the construction cost will balloon in the absence of
competition.


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