Prosecutors are investigating construction firms Kajima, Taisei, Obayashi Corp and Shimizu Corp for suspected breaches of anti-trust laws related to the US$80 billion maglev rail line.

The Tokyo prosecutors office said the two men were arrested on suspicion of colluding with Obayashi and Shimizu executives to illegally share orders for the project.

In separate statements, Kajima apologised for “causing concerns” and said it was cooperating with the investigation, while Taisei denied anti-trust laws had been violated.

Backed by cheap government loans, the maglev project linking Tokyo, Nagoya and Osaka has drawn criticism for its cost and lack of export potential. Proponents led by Prime Minister Shinzo Abe say the project will spark badly needed economic growth.

The case has raised concerns that bid-rigging is still a problem in the construction industry despite legislation introduced in recent years to stamp it out.