Too few bids for one in 10 public works projects
The Asahi Shimbun
By Eiji Zakoda - Nearly 1,200 public works projects, or roughly one in 10 that the central government tried to commission in fiscal 2006, were nonstarters because they didn't attract enough bidders, a survey shows.
Analysts said a more robust market for private-sector construction along with moves to end bid-rigging practices appear to explain the higher rate of projects that failed to attract a winning bid.
The Ministry of Land, Infrastructure and Transport surveyed the situation on a national basis from April after a number of regional development bureaus reported an increase in the number of projects that failed to end in a successful bid. It was the first such ministry survey.
Some of the projects received no bids at all, while in others, all of the bids exceeded the maximum price limit set by the central government.
The ministry studied 10,778 projects the central government planned to commission in fiscal 2006. Of those, 1,188 did not end with a successful bid...
Here's a fine conundrum for the labor economists: when the laws against collusive bid rigging and exceeding budgetary limits are enforced, over 10% of all projects become just too much trouble for even a perfunctory bid.
Funny thing that profit maximalization imperative--it makes even beggars choosers.
The weird corollary of all this - in the supposedly overstimulated and overcrowded construction sector, a low cost outsider could scoop up to 10% of all government contracts without bothering anyone else.
I am finding it harder and harder to take seriously those who argue that at least some of Koizumi fiscal reforms will have to be rolled back...