High Speed Rail reports first ever profit
The China Post news staff
June 23, 2012, 12:14 am TWN
The China Post news staff--The high-speed railway system turned a profit in 2011 for the first time since it started running over five years ago.
The Taiwan High Speed Rail Corporation (THSRC) yesterday reported NT$32.24 billion in revenues for 2011, rising from NT$27.64 billion in 2010. After-tax profit came to NT$5.78 billion.
Passenger volume last year also rose about 12 percent to 41.63 million people.
Speaking at a shareholders' meeting, THSRC Chairman Ou Chin-der said the company is seeking an extension of its franchise from the government.
Having invested NT$500 billion in building the system, the current 35-year franchise is unreasonably short, he said, adding that the company is looking to extend it to 70 years.
He said the company's success in having the government agree to restructure its debt, lower the interest rates and readjust the equipment depreciation three years ago, plus an average 10 percent rise in passenger volume since then, have allowed THSRC to earn profits.
Some shareholders complained that the THSRC, as a private company, should not be shouldering the heavy burden of discounted fares for the elderly, the mentally and the physically challenged.
Since its inception, according to the THSRC, it has shouldered almost NT$6 billion, or almost NT$100 million per month, from such discounted fares; the government has yet to reimburse the company.
Ou told the shareholders that the company is negotiating with the government for the reimbursement; if an agreement cannot be reached, the company may take the case to court.
The law stipulates that all public transportation providers must give discounted fares to the elderly, the mentally and the physically challenged.
Ou noted that such discounts usually account for 3 percent of sales for other public transport providers; for the high-speed rail, however, the percentage has been as high as 8 percent.
The Transport Ministry, however, has claimed that when the THSRC pricing scheme was set, it already reflected discounted fares and government subsidies.