Koike’s recent procurement reforms in Tokyo already up for review

The new rules for procurement of public works by the Tokyo Metropolitan Government pushed by Governor Yuriko Koike will undergo a review, reports Asahi Shimbun Digital on November 18.  The new rules were implemented in reaction to ballooning costs for large public work projects such as the Toyosu Market and venues for the Olympics, but drew harsh criticism from companies benefitting from the old situation. It now looks that a trend back to ‘business-as-usual’ is underway, as the Koike-effect is losing its shine after the national elections.

The new rules implemented in June of this year are blamed for delays the procurement procedures of large public works projects and regarded as too strict by the parties involved.  Measures such as no longer publishing the projected price in advance, cancelling construction tenders if only one bidder participates and abolishing the obligation to form JV, were introduced to control inflated prices and improve competition.

19% (44 cases) of the tenders, falling under the new regulations were suspended during the past months, according to TMG, as only one bidder showed up.  In many cases bidding prices were higher that projected, making it impossible to conclude a contract.  The new rules have had a delaying effect on projects related to the Toyosu Market, where remedial construction is necessary to deal with contaminated soil under the newly built structures.

While the initial goal of the reforms was to increase competition and transparency, of which foreign companies might also have benefitted, it looks that a small group of parties with vested interests in the status-quo is having the upper hand at the moment. 

Source: Asahi Shinbun Digital (J)

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