Total withdrawal from public-sector construction after the bid-rigging case (2006)

Reading it as cleaning up after a scandal does not go far enough

Read as the aftermath of an exposed bid-rigging case, the breadth of this withdrawal cannot be explained. What was prosecuted was a single field — sludge-recycling (night-soil) plants — and closing that alone would have satisfied appearances. Kurita nevertheless surrendered public-sector work across all 28 categories of the Construction Business Act and stated explicitly that no part of it would be transferred to group companies. Rather than a pledge not to repeat the offence, this can be read as choosing to eliminate from inside the company the very setting in which collusion can occur.

It would not be fair, though, to take this as pure integrity. The public-sector market had already shrunk under falling public-works budgets and intensifying competition, and sales to that sector in the year to March 2006 were below the year before. That the company left its forecast for the year to March 2007 unchanged after deciding to withdraw — and duly landed the year with higher sales and profit — also shows how little weight the abandoned business carried. The “big three” standing, once described as a third of a ¥50 billion-a-year market, had been thinning long before it was given up.