Gov't to run high speed rail without taking over THSRC

Vice Premier Eric Chu also stated yesterday that the government has no intention of turning THSR into a state enterprise at least for the time being.

Both stressed that the government will ensure the smooth daily operations of the high-speed rail so that the interests of passengers will not be compromised.

Meanwhile, Presidential Office spokesman Wang Yu-chi revealed that senior officials from the Presidential Office, the Executive Yuan and the ruling Kuomintang had discussed the struggling railway system at a recent regular meeting amid reports that the government could take over the debt-ridden THSRC.

THSRC, a private company that built the 345-kilometer railway, has been operating the line under a build-operate-transfer (BOT) contract with the government.

Premier Wu Den-yih was quoted as having said in the meeting that the high-speed rail system, which shortens travel time between Taipei in the north and Kaohsiung in the south to 90 minutes, should keep running normally.

"All other officials present at the meeting, including President Ma Ying-jeou, agreed to Wu's view," Wang said. "They unanimously agree that the government should keep the system running smoothly in a responsible manner."

Earlier yesterday, Premier Wu paid a visit to the Legislative Yuan to brief lawmakers from across the party spectrum on the government's stance on the high-speed railway's fate.

"The government's stance is clear that the rail system should remain operational," Wu told lawmakers.

In the face of this awkward situation, Wu said, the government still has to figure out a way to maintain the rail system's normal operations and financial viability.

He reiterated the government's stance of "no takeover and no increase of its investment in the company."

Instead, the premier said, the government will play a leading role in charting the company's operational direction to improve its financial status.

Wu said THSRC's monthly revenues still exceed its operating costs, so it runs a small operating profit.

"But the surplus has been more than offset by its heavy burden of interest payments, depreciation and amortization," Wu said, adding that high interest payments and amorization have been the main cause of the company's heavy indebtedness.

According to Wu, the government's involvement in a supervisory role could help persuade creditor banks to offer new loans at lower interest rates to keep the company afloat.

"That is the first step in resolving the THSRC's financial woes and the next step will be improving its depreciation and amortization issues," Wu said.

The government and several state-owned companies and organizations have stakes in the company, and Wu said the government has an interest in seeing the high-speed rail system operate smoothly with sound financing.

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