King of the roads

An analysis of the Great Japanese Road Scam

In Japan, all roads lead to Nagatacho.
But the 76 trillion-yen question is:
who gets to run the tollbooth?

A review of an article in the weekly
Shukan Diamond, 30 January 1993

A version of this article appeared in
Mainichi Daily News, 7 February 1993, page 9 (Waiwai Waido)

When a weekly magazine as modest and conventional as Shukan Diamond (30 January 1993) runs a banner like this on its cover and spine, you are tempted to read the 12-page, three-article feature collectively subtitled: "'The 76 trillion-yen plan': An anatomy of its political-bureaucratic-financial [private sector] concessions." Or, in this reviewer's own words: "How Japan's elected and self-appointed grafters are lining construction industry pockets in local pork-barreling schemes that aim to network the country with 14,000 kilometers of useless new freeways by the year 2015." That's about 11 centimeters of road per capita, including the millions of children who, by the time they become old enough to drive, will not find getting around by car much easier.

The lead article declares that the 76 trillion yen earmarked for Japan's 11th postwar road construction plan, to be carried out over the next five years, will not relieve the congestion that plagues the country's streets and highways. The new road allocation is 1.43 times the 53 trillion yen spent during the 10th plan. And it is 35 percent of the estimated 215 trillion (out of 430 trillion) that the government has slated for public works in its bid to reduce the trade surplus with the United States.

The 11th plan and four subsequent five-year plans will completely network the major islands in 25 years. Many of the new freeways will laterally connect the arteries that already run the length of the country. Most of these roads will cut through mountains, so their construction will be expensive. But Diamond says that not enough people will use the roads to generate the revenue needed to maintain them.

A professor of commerce at Keio University offers a prediction: "The public corporation that manages Japan's freeways is going to become a second Japan National Railways"--unable to pay its own way, and like JNR, destined to be broken up into privatized blocks.

"Building [more] roads [in rural areas] is important," says an engineering professor at the University of Tokyo, "but the cities need more money and personnel to help police control parking, and more efficient intersections that better facilitate traffic."

Construction Minister Nakamura Kishiro reportedly feels that such criticism ignores the need to bring convenience and affluence to people in rural areas--not to mention jobs. But it seems that too many new roads are going to be built for their own sake. Few local governments have development plans related to the new freeways--except for love hotels near the interchanges.

The second Diamond article looks at the "Japan-style mutual-racketeering structure that bends roads" to where power-brokers want them.

The construction industry is a political hotbed: As the saying goes, "There are no elections without roads." At the initial "paper location" stage, politicians in search of votes and contributions have a great influence on where a road is to be built. The object is to locate as many roads as possible in one's own electorate--and see that one's rivals get fewer interchanges.

This is the world of cozy dango collusions, leading to rigged contracts between bureaucracies that control public works projects, and private corporations that tender bids. One construction company executive comments: "My head would fly if we were to compete openly and the profits supported by collusion fell."

The article states that road concessions engineered by collusion between government and private corporations have become a fixture in Japanese society. But the director-general of the National Land Agency, Inoue Takashi, who admits that he has made his share of "calls from heaven" to influence the outcome of construction planning and contracts, feels that "if you let constructors compete, it would be possible to build more cheaply, but then you'd have problems with cheapness."

The need for quality control is suggested by statistics which claim that fewer than 5,000 of over half a million licensed contractors in Japan are financially and technically capable of taking on pubic works projects. And of these, "all you really need are the 50 largest general contractors," an insider tells Diamond The rest are subcontractors who are kept alive for use as labor pools.

Only the third article, the shortest, is signed, by political critic Suzuki Muneichi, who in two pages examines "the new directions of construction concessions" that are evident in "the scramble for power" that began with the downfall of Kanemaru Shin and Takeshita Noboru in the still-festering Tokyo Sagawa Kyubin scandal. (Kanemaru recently resigned his seat in Parliament and members of Takeshita's faction received illicit Sagawa funds that had gone initially to Kanemaru.) "It's as if Mount Fuji had exploded into eight peaks" is the way a leading official of the Construction Ministry is said to have put it.

As former bosses of the LDP zoku (tribe) that deals with the construction bureaucracy, both Kanemaru and Takeshita have played a pivotal role in the political maneuvering of the construction industry. They inherited this role from former prime minister Tanaka Kakuei, who built his entire political machine on construction concessions.

Suzuki writes that while the Kanemaru/Takeshita combination was supported by former LDP secretary-general Ozawa Ichiro, now the baton appears to be passing to Ozawa's intraparty rival, Obuchi Keizo, also a former LDP secretary-general--and, like Ozawa, a possible future prime minister.

As Suzuki describes it, the power struggle within the LDP is the battle over who becomes the construction boss. And whoever succeeds in controlling the construction industry after this war will rule Japan.