Nov. 19 (Bloomberg) -- The Tokyo Metropolitan Government failed to find builders for a new market in Tokyo Bay to replace Tsukiji, the world’s biggest fish market, amid rising material prices and demand for higher wages.
Three projects for the new fish market, worth a combined 63 billion yen ($630 million), failed to find takers among bidding groups led by Taisei Corp., Kajima Corp. and Shimizu Corp., according to statements on the local government’s website today.
As part of the drive to spur growth in the world’s third-largest economy, Prime Minister Shinzo Abe has called for increased spending in the construction industry to boost public works. A gauge of Japan’s prices ended four years of declines amid Abe’s campaign to stamp out 15 years of deflation, a government report showed on Oct. 25.
“I’ve never heard of an auction of this size failing,” said Yoji Otani, a Tokyo-based analyst at Deutsche Securities Inc. “In the past, companies would win projects even if it meant putting in a low bid. It shows that construction companies aren’t going to bend over backward to win work anymore.”
One project of four seeking builders -- a 7 billion yen development of a hygiene inspection facility -- went to a group led by Kanto Construction Co., according to a statement on the website.
The Tokyo government decided in 2001 to relocate the fish market from Tsukiji, built in 1935, to reclaimed land in Tokyo Bay. The move has been delayed in part because of toxic soil that needs to be removed from the new site.
“Construction companies indicated an interest in the projects, but pulled out in the end,” said Koji Ishii, head of the finance department at the Metropolitan Central Wholesale Market, which oversees markets in the Tokyo area. “A surge in wages and construction materials probably had an impact.”
The move from Tsukiji, the size of 43 football fields, is set to be partially financed by selling the existing site, two blocks from Japan’s most expensive land in the Ginza shopping district, according to the local government.
Tsukiji is listed among Japan’s most popular attractions by the Japan National Tourism Organization. An estimated 500 visitors a day gather as early as 4 a.m. at the market to observe tuna auctions, where buyers use hand signals to bid for fish that are later sliced with meter-long carbon-steel knives.
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