FTC rules that THSR is not a monopoly
By Joy Lee ,The China Post
January 9, 2014, 12:00 am TWN
TAIPEI, Taiwan -- The Fair Trade Commission (FTC, 公平會) yesterday said that the Taiwan High Speed Rail (THSR) does not qualify as a monopolistic enterprise in Taiwan's transportation market.
After THSR announced to increase to ticket prices by 9.6 percent, legislators passed a proposal to demand that the commission start an investigation to determine if the THSR's recent price increase violates the Fair Trade Act.
According to the FTC, based on the contract between THSR and the Transportation Ministry, THSR did have a chance increase ticket prices in the past four years but it didn't do so.
The FTC said that the THSR's price increase was based on its contract and it did not violate any regulations.
According to the FTC, travelers can choose other transportation methods, like Taiwan Railway and buses, if they travel within short distances instead of THSR, but the firm is more qualified as a monopoly when it comes to long-distance travel.
Based on the contract between the FTC and the Transportation Ministry, the maximum price adjustment range is 120 percent of the valuation, which can be adjusted based on the consumer price index.
However, the FTC said, the valuation in 2013 was NT$4.009, which brought the maximum for price increase to NT$4.8108, and THSR's price increase did not exceed the limit.
The FTC said that judging from these factors, THSR does not violate regulations to the Fair Trade Act and cannot be ruled as a monopolistic enterprise in Taiwan's transportation market.
According to THSR, the ticket price adjustment, which was meant to increase revenue for the cash-strapped firm — and would increase the cost of a round-trip ticket from Taipei to Kaohsiung by up to NT$280 — was officially launched on Oct. 8, along with more early bird discounts.
Transportation Ministry to Evaluate THSR
Transportation Minister Yeh Kuang-shih (葉匡時) yesterday said that the Transportation Ministry will evaluate the performance of THSR in response to recent incidents that affected many passengers.
Yeh said that he understands many people are not satisfied with THSR's performances and neither is the ministry.
A legislator demanded Yeh to assign a new chairman for THSR, and Yeh said that the ministry can only evaluate the performance of the entire firm instead of the performance of a person.
THSR Chairman Ou Chin-der (歐晉德) said recently that if the government extended the concession period, ticket prices could decrease by over 10 percent, but Yeh said no to the request for such an action might profit the firm's original shareholders.