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Infrastructure, Construction, Real Estate and Transport

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Q1 | Regulated industries

Which is an appropriate feature shared by the industries called regulated industries?

  1. The state is required by law to hold a majority of the shares
  2. Starting the business requires permission, registration, notification or the like under a law
  3. The level of employees' pay is fixed uniformly by law
  4. The state sets the prices of the goods handled every year
AnswerB. Starting the business requires permission, registration, notification or the like under a law

A regulated industry is one where starting the business needs a legal procedure. Electricity, gas, railways, aviation, construction and real estate are examples, and the procedure itself becomes a barrier to entry. Shareholding, pay and how prices are set are not fixed uniformly.

Q2 | Electricity retailing

What procedure does the Electricity Business Act (電気事業法) require of a person seeking to run a retail electricity business?

  1. Registration with the Minister of Economy, Trade and Industry
  2. Advance notification to the mayor of the municipality
  3. Permission from the Minister of Land, Infrastructure, Transport and Tourism
  4. A licence from the prefectural governor
AnswerA. Registration with the Minister of Economy, Trade and Industry

Article 2-2 of the Electricity Business Act provides that a person seeking to run a retail electricity business must be registered with the Minister of Economy, Trade and Industry. Note that this is registration, not permission.

Q3 | Permission for transmission

What procedure does the Electricity Business Act require in order to run a general electricity transmission and distribution business?

  1. Permission from the Minister of Economy, Trade and Industry
  2. No procedure is required
  3. Notification to the Minister of Economy, Trade and Industry
  4. Registration with the Minister of Economy, Trade and Industry
AnswerA. Permission from the Minister of Economy, Trade and Industry

Article 2, paragraph 1, item 9 of the Electricity Business Act defines a general electricity transmission and distribution operator as a person who has obtained the permission under Article 3 to run that business. It is a heavier procedure than registration for retail supply, and the field remains a regional monopoly.

Q4 | Procedure for generation

Which is a correct description of an electricity generation operator under the Electricity Business Act?

  1. A person who has given notification of running an electricity generation business
  2. A person who has obtained permission to run an electricity generation business
  3. Generation is outside the Electricity Business Act, so no procedure is needed
  4. A person registered to run an electricity generation business
AnswerA. A person who has given notification of running an electricity generation business

Article 2, paragraph 1, item 15 of the Electricity Business Act defines an electricity generation operator as a person who has given the notification under Article 27-27, paragraph 1 about running an electricity generation business. Generation takes notification, retail takes registration and general transmission and distribution takes permission, three steps in all.

Q5 | Limits on side businesses

Which act does Article 22-2 of the Electricity Business Act prohibit in principle for a general electricity transmission and distribution operator?

  1. Providing wheeling services to other companies
  2. Taking the form of a stock company
  3. Running transmission lines outside its supply area
  4. Running a retail electricity business or an electricity generation business
AnswerD. Running a retail electricity business or an electricity generation business

Paragraph 1 of that article provides that a general electricity transmission and distribution operator must not run a retail electricity business, an electricity generation business or a specified wholesale supply business, except where approval is obtained from the Minister of Economy, Trade and Industry. It is the central provision of legal unbundling, keeping transmission and distribution neutral.

Q6 | Retail liberalisation

When was full liberalisation of electricity retailing carried out?

  1. April 2016
  2. April 2011
  3. April 2013
  4. April 2022
AnswerA. April 2016

The Energy White Paper of the Agency for Natural Resources and Energy records that full liberalisation of electricity retailing was carried out in April 2016. From then on households too could choose who to buy their electricity from.

Q7 | Legal unbundling

When was legal unbundling of the transmission and distribution arm carried out?

  1. April 2020
  2. April 2016
  3. April 2015
  4. April 2024
AnswerA. April 2020

The Energy White Paper of the Agency for Natural Resources and Energy records that legal unbundling of the transmission and distribution arm was carried out in April 2020. April 1, 2015 is the launch of the Organization for Cross-regional Coordination of Transmission Operators, and April 2016 is full retail liberalisation.

Q8 | Categories in gas

Which is the correct procedure for the general gas pipeline service business under the Gas Business Act (ガス事業法)?

  1. Approval
  2. Permission
  3. Notification
  4. Registration
AnswerB. Permission

Article 2, paragraph 6 of the Gas Business Act defines a general gas pipeline service operator as a person who has obtained the permission under Article 35. The gas retail business takes registration (Article 3 of the same Act) and the gas manufacturing business takes notification (Article 86, paragraph 1 of the same Act), matching the categories used for electricity.

Q9 | TEPCO Holdings

Based on what is stated on its official website, which is correct about Tokyo Electric Power Company Holdings, Inc. (東京電力ホールディングス株式会社)?

  1. It has never changed its name since it was established
  2. It holds the permission for the general transmission and distribution business itself and operates the transmission lines
  3. It is a company newly established on April 1, 2016 by merging with another company
  4. It changed its trade name on April 1, 2016 and oversees the group as a holding company
AnswerD. It changed its trade name on April 1, 2016 and oversees the group as a holding company

The company outline records establishment on May 1, 1951 and a change of trade name on April 1, 2016, when Tokyo Electric Power Company became Tokyo Electric Power Company Holdings and moved to a holding company structure. Transmission and distribution is handled by a subsidiary.

Q10 | TEPCO's operating companies

Which combination of roles for the operating companies of the TEPCO group matches what is stated on the official website?

  1. Both companies handle only the development of renewable energy
  2. TEPCO Power Grid handles electricity retailing, and TEPCO Energy Partner handles transmission and distribution and fuel procurement
  3. Both companies handle thermal power generation and fuel procurement, and neither does any transmission and distribution or electricity retailing
  4. TEPCO Power Grid handles transmission and distribution, and TEPCO Energy Partner handles electricity, gas and daily living
AnswerD. TEPCO Power Grid handles transmission and distribution, and TEPCO Energy Partner handles electricity, gas and daily living

The group structure page shows TEPCO Power Grid Incorporated for transmission and distribution, TEPCO Energy Partner Incorporated for electricity, gas and daily living, and TEPCO Fuel and Power Incorporated for thermal power and fuel.

Q11 | Class I railway business

Which is the correct description of the Class I railway business under the Railway Business Act (鉄道事業法)?

  1. A business that lays railway track itself and lets Class II railway operators use it exclusively, carrying out no transport itself
  2. A business that carries passengers or freight using track laid by others, owning no track itself
  3. A business that carries passengers or freight by ropeway
  4. A business that carries passengers or freight on its own railway track, other than the Class II railway business
AnswerD. A business that carries passengers or freight on its own railway track, other than the Class II railway business

This is the definition in Article 2, paragraph 2 of the Railway Business Act. Owning both the track and the trains and carrying out the transport is the most typical form, the Class I railway business. The ropeway business is defined separately in paragraph 5 of the same article.

Q12 | Class II railway business

Under the Railway Business Act, what is a business that runs freight trains on track laid by another company?

  1. The Class I railway business
  2. The Class III railway business
  3. A dedicated railway for one's own use
  4. The Class II railway business
AnswerD. The Class II railway business

Article 2, paragraph 3 of the Railway Business Act defines the Class II railway business as a business carrying passengers or freight by rail using railway track other than track it lays itself. Owning only the track is Class III, and one used exclusively for one's own purposes is a dedicated railway.

Q13 | Permission for railways

What procedure is required of a person seeking to run a railway business?

  1. Permission from the Minister of Land, Infrastructure, Transport and Tourism
  2. Approval from the mayor of the municipality
  3. Registration with the Minister of Economy, Trade and Industry
  4. Notification to the prefectural governor
AnswerA. Permission from the Minister of Land, Infrastructure, Transport and Tourism

Article 3, paragraph 1 of the Railway Business Act provides that a person seeking to run a railway business must obtain permission from the Minister of Land, Infrastructure, Transport and Tourism. The permission is given for a route and a class of railway business (paragraph 2 of the same article).

Q14 | How private railways are built

Which is an appropriate description of the business model common among Japan's private railways?

  1. They can set fares freely, so they cover nearly all their earnings by raising fares
  2. They are barred from owning track, so they all operate as Class II railway businesses
  3. They develop housing and commercial facilities along the lines they lay, holding sources of earnings besides transport
  4. They concentrate on running trains alone and hold no other business at all
AnswerC. They develop housing and commercial facilities along the lines they lay, holding sources of earnings besides transport

Developing residential areas along the line, putting commercial facilities at the terminal, and building leisure facilities at the far end, so that fares, real estate and retail all turn within one corporate group, is the common shape among Japan's private railways. Looking only at the transport segment gives a false picture of the company.

Q15 | Hankyu Hanshin

Which does Hankyu Hanshin Holdings, Inc. (阪急阪神ホールディングス株式会社) not list on its official website as a business field of the group?

  1. Entertainment
  2. Urban transport centred on railways
  3. Real estate development and leasing
  4. Semiconductor manufacturing
AnswerD. Semiconductor manufacturing

The official website lists urban transport, real estate, entertainment, information and communication technology, travel, and international transportation as the group's business fields. Semiconductor manufacturing is not among them.

Q16 | The Tokyu reorganisation

Based on what is stated on its official website, which is correct about the history of Tokyu Corporation (東急株式会社)?

  1. The trade name has not changed since the founding and no business has been split off
  2. It merged with another railway company in 2019 to form a new company
  3. It changed its trade name in 2019 but did not split off the railway business
  4. It changed its trade name to Tokyu in September 2019, and in October of the same year the railway business was taken over by Tokyu Railways
AnswerD. It changed its trade name to Tokyu in September 2019, and in October of the same year the railway business was taken over by Tokyu Railways

The history records a change of trade name to Tokyu on September 2, 2019, and that on October 1, 2019 (2019年10月1日) Tokyu Railways took over the railway and tramway business through a company split and began operations. The holding function and the running of the railway were separated.

Q17 | Permission in aviation

What procedure does the Civil Aeronautics Act (航空法) require of a person seeking to run an air transport business?

  1. Permission from the Minister of Land, Infrastructure, Transport and Tourism
  2. Notification to the Minister of Economy, Trade and Industry
  3. Registration with the Prime Minister
  4. Approval from the airport administrator
AnswerA. Permission from the Minister of Land, Infrastructure, Transport and Tourism

Article 100, paragraph 1 of the Civil Aeronautics Act provides that a person seeking to run an air transport business must obtain permission from the Minister of Land, Infrastructure, Transport and Tourism. A person holding that permission is a domestic air carrier (Article 102, paragraph 1 of the same Act).

Q18 | Foreign capital in aviation

Which is correct about the requirements for registering an aircraft under the Civil Aeronautics Act?

  1. An aircraft owned by a corporation in which a foreign national holds even a single share cannot be registered at all, whatever it is used for
  2. Even for a corporation in which foreign nationals and the like hold a majority of the voting rights, aircraft it owns may be registered freely
  3. An aircraft of a corporation in which foreign nationals and the like make up one third or more of the officers, or hold one third or more of the voting rights, cannot be registered
  4. No restriction relating to foreign capital is placed on the registration of aircraft
AnswerC. An aircraft of a corporation in which foreign nationals and the like make up one third or more of the officers, or hold one third or more of the voting rights, cannot be registered

Article 4, paragraph 1, item 4 of the Civil Aeronautics Act provides that an aircraft owned by a corporation in which foreign nationals and the like make up one third or more of the officers, or hold one third or more of the voting rights, cannot be registered. It is a textbook case of licensing acting as a barrier to entry.

Q19 | Liner and tramp

Which is an appropriate description of the difference between liner and tramp shipping?

  1. Liners run on fixed routes to a fixed schedule, while tramps head to wherever the cargo is, trip by trip
  2. Liners run only between domestic ports, while tramps run only to and from overseas ports
  3. Liners carry no cargo at all and carry only passengers, on fixed routes to a fixed schedule
  4. Tramps may run freely on any route without going through any legal procedure at all
AnswerA. Liners run on fixed routes to a fixed schedule, while tramps head to wherever the cargo is, trip by trip

The container ship is the typical liner, carrying cargo from many shippers on fixed routes to a fixed schedule. Tramps are mainly ships carrying bulk cargo such as iron ore, coal and grain, or specialised ships for crude oil and liquefied natural gas. The split is not domestic versus overseas.

Q20 | The founding of ONE

Which is correct about Ocean Network Express Pte. Ltd. (ONE) as described by Nippon Yusen Kabushiki Kaisha on its official website?

  1. It is a company Nippon Yusen set up jointly with others to operate specialised tramp vessels carrying iron ore and coal
  2. Nippon Yusen, Kawasaki Kisen and Mitsui O.S.K. Lines, 3 companies in all, integrated their liner container businesses and set it up as a joint venture
  3. It is a subsidiary set up with investment from Nippon Yusen alone, which took over the liner container business
  4. It is a special corporation set up with state funding for the purpose of operating liner container services
AnswerB. Nippon Yusen, Kawasaki Kisen and Mitsui O.S.K. Lines, 3 companies in all, integrated their liner container businesses and set it up as a joint venture

The liner business page records that in 2017 the 3 companies, Nippon Yusen, Kawasaki Kisen and Mitsui O.S.K. Lines, went ahead with integrating their liner container businesses, set up ONE as a joint venture in Singapore, and began services in April 2018.

Q21 | Construction permits

Which correctly states what the Construction Business Act (建設業法) provides about permits for the construction business?

  1. Whatever the location or number of its offices, every construction business must obtain a single permit from the Minister of Land, Infrastructure, Transport and Tourism
  2. Whatever the number of offices, a permit must be obtained from the mayor of the municipality having jurisdiction over each office
  3. Where offices are set up in two or more prefectures, permission comes from the Minister of Land, Infrastructure, Transport and Tourism, and where there is only one prefecture, from the governor
  4. Once a permit is obtained there is no need to renew it
AnswerC. Where offices are set up in two or more prefectures, permission comes from the Minister of Land, Infrastructure, Transport and Tourism, and where there is only one prefecture, from the governor

This is the rule in Article 3, paragraph 1 of the Construction Business Act. A permit loses effect unless renewed every five years (paragraph 3 of the same article). A person undertaking only minor construction work prescribed by Cabinet Order needs no permit.

Q22 | Specified construction business

Which case, under the Construction Business Act, calls for a specified construction business permit?

  1. Where, on a single job taken directly from the client, the company's stated capital comes to at least the amount prescribed by Cabinet Order
  2. Where, on a single job taken directly from the client, the work is to be carried out under subcontracts of at least the amount prescribed by Cabinet Order
  3. Where work overseas is to be undertaken
  4. Where, on a single job taken directly from the client, the number of regular employees would exceed the figure prescribed by Cabinet Order
AnswerB. Where, on a single job taken directly from the client, the work is to be carried out under subcontracts of at least the amount prescribed by Cabinet Order

This is the rule in Article 3, paragraph 1, item 2 of the Construction Business Act. Whether a general construction business permit or a specified construction business permit is needed turns on whether the company stands as prime contractor entering into large subcontracts. It does not turn on employee numbers or stated capital.

Q23 | Prime and subcontractor

Which correctly states a term as defined in the Construction Business Act?

  1. A client means a party that passes on to others work it has taken from someone else
  2. A subcontractor means the architect who designs the work
  3. A prime contractor means the tradespeople who actually carry out the work
  4. A prime contractor is the party ordering the work under a subcontract who is a construction business operator
AnswerD. A prime contractor is the party ordering the work under a subcontract who is a construction business operator

Article 2, paragraph 5 of the Construction Business Act defines the client as the party ordering construction work that has not been taken from someone else, the prime contractor as the party ordering work under a subcontract who is a construction business operator, and the subcontractor as the party undertaking the work under a subcontract.

Q24 | Blanket subcontracting

What does Article 22 of the Construction Business Act provide?

  1. That a construction business operator must not have another person undertake, as a whole, construction work it has taken on
  2. That a prime contractor must choose three or more subcontractors
  3. That a subcontractor must take on the work at a lower price than the prime contractor
  4. That subcontracts must be concluded orally
AnswerA. That a construction business operator must not have another person undertake, as a whole, construction work it has taken on

This is the ban on blanket subcontracting, which prohibits simply passing the whole job on. It does not apply, for work other than important construction work, where the prime contractor has obtained the client's written consent in advance (paragraph 3 of the same article).

Q25 | Supervising engineers

Which is a correct description of the supervising engineer under the Construction Business Act?

  1. It is an engineer needed in order to apply for a construction business permit, and must be placed at head office rather than at the site
  2. One must be placed at the site of every piece of construction work, whatever the scale of the job or the size of the contract price
  3. A specified construction business operator that has taken work directly from the client places one at the site where it enters into subcontracts of at least the amount prescribed by Cabinet Order
  4. One must be placed at the design office rather than at the construction business operator, in order to prepare the design documents used for the work
AnswerC. A specified construction business operator that has taken work directly from the client places one at the site where it enters into subcontracts of at least the amount prescribed by Cabinet Order

This is the rule in Article 26, paragraph 2 of the Construction Business Act. The engineer placed when carrying out work is the chief engineer (paragraph 1 of the same article), and at a prime contractor's site involving large subcontracts a supervising engineer is placed instead.

Q26 | General contractors

Which is an appropriate description of the relationship between a general contractor and a subcontractor?

  1. The general contractor usually takes the whole job directly from the client and pulls the site together, while the subcontractor takes on specialist work
  2. A subcontractor cannot obtain a construction business permit
  3. Both terms are defined in the Construction Business Act and each has its own category of permit
  4. The general contractor takes on only specialist work, while the subcontractor usually takes the whole job directly from the client and pulls the site together
AnswerA. The general contractor usually takes the whole job directly from the client and pulls the site together, while the subcontractor takes on specialist work

Zenekon (ゼネコン) is a nickname for a general construction company and sabukon (サブコン) for a specialist contractor in steelwork, electrical installations, air conditioning, interiors and the like; neither is a legal term. In most cases the general contractor stands as prime contractor and the specialist as subcontractor. Design may be left to a design office, or the general contractor may take on both design and construction together.

Q27 | Real estate licences

Which correctly states what the Building Lots and Buildings Transaction Business Act (宅地建物取引業法) provides for a person seeking to run a building lots and buildings transaction business?

  1. Once a licence is obtained there is no term of validity
  2. Whatever the number of offices, registration must be obtained from the mayor of the municipality having jurisdiction over each office
  3. Whatever the location or number of offices, notification to the Minister of Land, Infrastructure, Transport and Tourism is enough and no licence need be obtained
  4. Where offices are placed in two or more prefectures, the licence comes from the Minister of Land, Infrastructure, Transport and Tourism, and where there is only one prefecture, from the governor
AnswerD. Where offices are placed in two or more prefectures, the licence comes from the Minister of Land, Infrastructure, Transport and Tourism, and where there is only one prefecture, from the governor

This is the rule in Article 3, paragraph 1 of that Act. The licence runs for five years and must be renewed to carry on (paragraphs 2 and 3 of the same article). There is also a duty to place at each office the number of full-time, adult real estate transaction specialists prescribed by Ministry of Land, Infrastructure, Transport and Tourism ordinance (Article 31-3, paragraph 1 of the same Act).

Q28 | Obayashi

Which field does Obayashi Corporation (株式会社大林組) not list on its official website among the fields it operates in?

  1. Scheduled air transport
  2. Green energy
  3. Engineering
  4. Overseas construction
AnswerA. Scheduled air transport

The business page explains that, with domestic construction at the core, the company operates in overseas construction, engineering, real estate development, green energy and new business domains. That a construction company holds a development business is a key point in researching the industry.

Q29 | JGC's segments

Which two segments does JGC Holdings Corporation (日揮ホールディングス株式会社) put at the centre of its business on its official website?

  1. Liner shipping and dry bulk
  2. Domestic construction and real estate development
  3. Total engineering and functional materials manufacturing
  4. Retail electricity and general transmission and distribution
AnswerC. Total engineering and functional materials manufacturing

The business introduction page puts two segments at the centre, total engineering and functional materials manufacturing. Plant construction is carried out in the EPC form, taking on design, procurement and construction together.

Q30 | Investment corporations

Which is correct about an investment corporation under the Act on Investment Trusts and Investment Corporations?

  1. Its establishment requires permission from the Minister of Land, Infrastructure, Transport and Tourism, and it must manage its assets itself
  2. It may neither set up offices besides its head office nor employ staff, and entrusts management to an asset management company
  3. It may run a retail business alongside asset management, and may set up offices besides its head office and employ staff
  4. It may employ many staff of its own and set up offices besides its head office in order to manage real estate
AnswerB. It may neither set up offices besides its head office nor employ staff, and entrusts management to an asset management company

Article 63 of that Act provides that an investment corporation may not carry on anything other than asset management as its business, and may neither set up offices besides its head office nor employ staff. A registered investment corporation must entrust asset management work to an asset management company (Article 198, paragraph 1 of the same Act).

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