TOKYO -- Kansai International Airport is sinking into the sea, mute, inescapable evidence that even the Japanese, who pride themselves on their perfectionist work habits and technical expertise, can't do everything right.

The $8 billion project, which is being built on a man-made island in Osaka Bay, was supposed to open in March 1993, providing Japan with its first 24-hour-a-day airport -- a marvel of engineering ingenuity that, because of its offshore location, would produce virtually no noise pollution in the nearby cities of Osaka and Kobe.

But airport officials admitted in recent days that they won't be able to open the airport until the summer of 1994, about 15 months behind schedule. The delay, according to airport president Yoshio Takeuchi, is partly attributable to the fact that the man-made island is "settling faster than anticipated," which is a polite way of saying that it is sinking under its own weight into Osaka Bay.

Therein lies a story -- not about Japanese technical bumbling, but about the lengths to which Japanese often will go to keep foreign companies out of the Japanese economy.

In 1987, Japanese officials rejected a U.S. request to allow American companies to help build the man-made island. The soil and water conditions in Osaka Bay, they asserted, were so unusual that only Japanese firms could handle the job.

In response to Washington's demands that Japan open its lucrative, highly protected construction market, Tokyo did grudgingly allow foreign firms to bid on certain public-works projects, including the airport's terminal and runways. But the construction of the airport foundation was put off limits to non-Japanese companies.

"Isn't it ironic that the Japanese said, 'Only Japanese can work on the soil in this area' -- and yet the result is so bad," said one American who was involved in the negotiations.

To critics of Tokyo's economic policies, the episode affords a counterpoint to the view sometimes advanced by the Japanese that their land is "different" and therefore unsuitable for certain types of foreign enterprise. The notion that Osaka Bay is a uniquely difficult site, the critics say, is a typical example of the excuses Japanese officials have used on some occasions to limit foreign participation in their market.

In one oft-cited case, for example, Tokyo trade officials sought to justify regulations that would have barred imported skis by claiming that Japanese snow is different from snow elsewhere. In another case, a Japanese trade negotiator was quoted as explaining that imported beef must be restricted because Japanese people's intestines are different from other peoples'.

C. Bruce Smart, a former undersecretary of commerce who negotiated with the Japanese to open Kansai airport and other construction projects to foreign bidders, said, "We tried to persuade them that America had some of the best soil engineers in the world." But the Japanese, Smart recalled, "kept saying that their conditions were unique to Japan and there was no question of hiring anyone else to do the {island-building} work."

"I thought that was ridiculous," Smart said. "Geology doesn't respect national boundaries."

Despite such incidents, Japan has opened its doors wider to foreign products in recent years, under pressure from Washington and other trading partners. But the Kansai episode, critics say, is a reminder of how far the Japanese have to go in changing fundamental attitudes, especially in industries such as construction that are dominated by cartels, bid-rigging and cozy ties with government ministries.

Kansai airport officials contend -- and U.S. officials concede -- that American firms were never very interested anyway in the land-reclamation work for the island. "The main concern of the Americans was for {terminal} construction, for consulting jobs and goods procurement," said Nobuyuki Higuchi, the airport's international affairs manager.

Moreover, there were a number of good reasons for excluding the foreigners from the land-reclamation phase of the project, according to Takeuchi, the airport president. By 1987, he said, Japanese firms had already devoted about 20 years of research to the idea of building the man-made island, and they had already begun work using the world's best collection of pile drivers and other heavy machinery of the sort required to do the job.

But the recent disclosures about the airport's sinking problem has embarrassed the airport authorities at a particularly awkward time, because U.S. officials and business managers have been complaining recently that the airport is not handling the bidding procedure for the terminal fairly.

AEG Westinghouse, a joint venture of Westinghouse Electric Corp. of the United States and AEG of Germany, is crying foul over losing a bid to build the airport's moving-walkway system to a less-experienced Japanese group. Sen. Frank Murkowski (R-Alaska) recently traveled here with AEG Westinghouse officials to warn that Congress may take retaliatory action against Japanese construction companies in the United States.

Kansai Airport officials reject the charges, saying that the Japanese group is capable of completing the contract and that it made a much lower bid than AEG Westinghouse.

Airport officials are also unapologetic about their decision to restrict the island-building construction to Japanese firms. In fact, they say, the island's sinking problem ironically has proved the correctness of the decision.

The delay was reduced by a number of months, said Haruo Inoue, the airport's managing director and vice president, "because the Japanese companies involved have made all-out efforts" to add more soil and shore up the island.

Staff writer Stuart Auerbach contributed to this article from Washington.