Deficit might force a reduction in services of high-speed trains

The company knocked several domestic air carriers out of flight service to major metropolises in central and southern Taiwan in the past two years because many frequent flyers switched to the rail service.

But THRC already incurred a loss of NT$13.1 billion even before inaugurating service in January 2007.

Despite the injection of revenues from ticket sales, the company ran up a loss of NT$29.4 billion for the first year and boosted cumulative loss to NT$42.5 billion, mainly because of interest burden on loans.

Income from tickets, totaling NT$13.5 billion in 2007 and NT$23 billion last year, was unable to put a check on the financial bleeding.

Total deficit expanded to NT$67.5 billion at the end of 2008, accounting for almost 65 percent of NT$105.3 billion in corporate capital.

The company has taken steps to save costs, including a pay reduction for middle- and senior-level executives plus a reduction of 126 train runs per week — 13 percent of total — starting on March 16.

More recent measures include terminating the contract with an outsourced cleaning firm and asking service staff aboard the trains to do the job.

Executives said a possible further cut in train runs is under consideration. Trains with loading rate under 30 percent are most likely to face the ax.

They said they continue pursue a plan to revise its loan structure in order to raise new loans carrying lower interest rates to repay old debts of higher rates in order to slash financial burden.

The company will also seek to revise and extend equipment amortization period from the period of 35 years as stipulated in the original contract signed with the government, the executives added.

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