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No. 360, September 1999

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American Companies in Japan


CONSTRUCTION AND REAL ESTATE

Over time, the government's new private finance initiative should create business opportunities for U.S. engineering and construction companies. Already, civil engineering giant BECHTEL CORP. has agreed to work with big contractor TAISEI CORP. to win contracts for PFI projects and execute them. Under the private finance initiative, the public sector in Japan hopes to harness the resources, both financial and technical, of the private sector to build economic and social infrastructure. That could include anything from roads to incinerators. PFI is an attempt to get around the bottleneck to the implementation of public works programs caused by the inability of local governments to come up with their share of the money because of strained finances.

With technical assistance from Houston's HORIZONTAL DRILLING INTERNATIONAL, INC., which specializes in the installation of pipelines, conduits and cables beneath rivers, highways and similar barriers, SUMITOMO METAL INDUSTRIES, LTD. and an affiliate developed an improved method of what is called horizontal directional drilling. This technology marries conventional road boring and the directional drilling used for oil wells. As the Pipeline Arc-Shaped SMI-DRIX name of SMI's technique suggests, the installation is arc-shaped. In simplified terms, it is achieved by drilling a pilot hole at a prescribed angle from horizontal and continuing it under the obstacle, then enlarging the path with a reamer and finally pulling the prefabricated pipeline through. SMI estimates that its method not only cuts construction time but also reduces the cost of laying pipelines across barriers by 20 percent to 30 percent.

An exchange rate of ¥113=$1.00 was used in this report.aaaaaa

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