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June 27, 2017

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MOEA urges probe of power repurchase talks between IPPs, Taipower

The China Post--Economic Minister Shih Yen-shiang (施顏祥) stated that he had urged the ministry's Civil Service Ethics Department to investigate negotiations of electricity repurchases between independent power producers (IPPs) and the Taiwan Power Company (Taipower, 台灣電力公司) in 2007, to see if there was any misconduct.

According to Shih, the convener of negotiations was Hsieh Fa-dah (謝發達), the nation's current representative in Singapore and the then vice minister of the Ministry of Economic Affairs (MOEA) at that time. Shih said the mission given to the Civil Service Ethics Department is to discover details of the decision-making process.

In 2007, IPPs asked the government to adjust fuel prices in contracts to reflect the rising procurement costs. At the same time, the government demanded that the interest rate stipulated in these contracts be amended at the same time to reflect the true borrowing costs. While fuel costs in these contracts were adjusted, interest rates remained unchanged.

The minister's statement aroused the skepticism of legislators. They stated that minutes were not recorded for the meetings, and Hsieh is the only person who knows what happened. Whether the truth will be uncovered remains in doubt, according to legislators.

Representatives Should be Replaced: Legislators

Legislators further stated that they did not understand why the negotiation starting this year between Taipower and these IPPs failed since companies affiliated with the government — Mega International Commercial Bank (Megabank, 兆豐國際商業銀行) and China Development Financial (中華開發), for example — have a significant amount of shares in these IPPs.

Shih replied that he and the Taipower chairman were in contact with the Ministry of Finance in order to gain assistance from Megabank. Representatives from government-affiliated companies, however, were afraid of breaching their fiduciary duties and did not stand on the same side with Taipower.

Legislators thus panned representatives from these companies as disregarding the public welfare, and criticized the government for its reluctance to exert pressure and offer help to Taipower. They urged the government to replace these representatives.

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