Tokyo governor: Tsukiji demolition work tender procedures in violation of WTO rules

Recently appointed governor Yuriko Koike is set to look into more large-scale tenders. Tenders procedures related to three main Olympic venues are currently under investigation, after prospective prices (price set by the procuring entity) were hiked between 2 and 7 times before a winning bidder was decided, contributing to ballooning costs for the Games’ preparation.

However, other large tenders are also under investigation, reports national broadcaster NHK. It is now suspected that the tender for the demolition of the former Tsukiji fish market was not conducted properly in accordance with the international rules on government procurement. The demolition project as a whole should have been above the WTO Agreement on Public Procurement threshold of 2.4 billion yen (21 EUR million) and should have been tendered to an international audience with English-language announcements.  Instead, the project was cut up in four parts, so the procurement could be conducted with local procedures. Governor Koike said in an NHK-interview that “When investigating the tender for the demolition of the Tsujiki, viewpoints have come up that it is in violation of WTO rules.”

This comment comes on top of the recent furor about the venue for the new central fish market location at Toyosu, which centers on environment safety due to design mistakes in the new market buildings. Hower the tender procedure regarding the Toyosu market is also under suspiction as prospected prices were hiked there as well up to 60%, in a similar way as the Olympic venues.

All the revelations point towards systemic flaws in the public procurement of public works, where a small group of domestic large construction company in manages to talk up prices in direct consultations with the contracting entities, effectively disavowing the competitive aspect of public procurement, which is meant to give Tokyo’s tax-payers the best deal for the best price.

Sources: NHK [1], [2]

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