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June
2007
May Construction Orders Up
48.3% On Year
Total construction orders received by Japan's 50 leading domestic
contractors rose 48.3% on year to Y1.047 trillion in May, the Ministry of
Land, Infrastructure and Transport said Friday. Construction orders rose
1.8% in April, and fell 1.6% in March. Orders from the public sector rose
51.9% to Y96.1 billion, while those for the private sector climbed 38.4%
to Y789.4 billion. Overseas construction orders more than tripled on year
to Y118.1 billion, the ministry said. (Dow Jones, June 29, 2007)
May Housing Starts Down 10.7%
On Year
Japan's housing starts fell 10.7% in May from a year earlier to 97,076
units, the Ministry of Land, Infrastructure and Transport said Friday. The
decrease was much larger than expected by economists surveyed by Dow Jones
Newswires, who predicted a fall of 0.6% on year. It was the second
straight month of declines after the figure fell 3.6% on year in April.
Annualized housing starts were at 1.155 million units. Private housing
starts for individuals' homes in May fell 12.7% on year to 28,848 units,
while rental housing fell 7.8% to 41,264. Meanwhile, multi-unit dwellings
fell 14.0% to 25,956. Multi-unit starts include those of condominiums.
(Dow Jones, June 29, 2007)
September
2006
Land Ministry To Require
Screening Of Public Works Bidders
The Land and Infrastructure Ministry will introduce in late October an
open competitive bidding system for public works projects that will entail
a screening of participants by private-sector firms. Open competitive
bidding is highly transparent due to the sheer number of bidders who can
participate. But concerns that financially weaker construction companies
might intentionally place lower bids to win orders have stymied its use.
The ministry plans to prevent such underbidding by instituting a guarantee
structure. It will tap private-sector financial institutions, such as
nonlife insurance companies and banks, to screen the finances of
construction firms that seek to participate in the bidding process.
Construction companies deemed to have appropriate finances will be issued
bonds that serve as a guarantee that they will be able to execute project
contracts. Firms that do not obtain the guarantee cannot bid for projects.
The framework will first be introduced in the Tohoku and Kinki regions and
apply to civil engineering projects, including highways and bridges,
valued at least 720 million yen. Bids on about 10 projects are slated to
require the guarantees in the first year. Starting in fiscal 2007, the
ministry will expand its usage of the bidding framework and urge other
government ministries to implement the requirement for guarantees as well.
(The Nihon Keizai Shimbun, September 08, 2006)
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