Morrison Knudsen Gets Role in Japanese Project

Morrison Knudsen Corp. said Wednesday that it will participate in a joint venture with a Japanese civil engineering company to construct a $50-million office and residential tower in downtown Tokyo.

Boise, Ida.-based Morrison Knudsen said its international unit teamed with Hazama-Gumi Ltd. to win the contract from Shuwa Corp., a large Japanese real estate developer that also owns office buildings, hotels and industrial parks in the United States. Morrison Knudsen said it will manage construction of the 16-story building, among other possible responsibilities. Morrison Knudsen spokesman Jess Hawley said the company may eventually receive 37% of the project’s budget. The firms’ overall role in the project “has not yet been fixed,” he said.

The joint venture results from nine general construction licenses granted to American companies since the Japanese agreed to open up their construction market to American firms in May, 1988. Since the licenses were granted, American firms have won participation in five projects--primarily through joint ventures with Japanese concerns. However, the American role has thus far been limited.

San Francisco-based Bechtel Group is in the final stages of negotiations for what would be the largest construction contract awarded to a foreign firm in Japan. Bechtel, the giant, privately held engineering and construction firm, is seeking a $300-million to $370-million contract to help Fujita Corp. build two geothermal power plants on Kyushu Island. A Bechtel spokesman said the negotiations are proceeding smoothly, although they are taking longer than expected.

Morrison Knudsen’s joint venture with Hazama-Gumi marks the return of the design, engineering and construction concern to international markets after a hiatus of five years. It also reflects the influence of William M. Agee, the former Bendix Corp. chairman, who took the top post at Morrison Knudsen nearly a year ago. The post had been vacant for three years--a period during which the company, with $2 billion a year in revenue, began to incur losses.

Hawley said the company plans to pursue other joint ventures with Hazama-Gumi for projects throughout the Pacific Rim and Los Angeles.